TL;DR
- Magic Eden, a leading Solana NFT marketplace, announced 22 layoffs as part of a company-wide restructuring effort.
- Many other prominent crypto companies, including Huobi, Coinbase, and Blockchain.com, have also announced layoffs in 2023.
- The tech sector is facing a difficult year, with many large tech companies announcing significant job cuts, and smaller tech firms that experienced hypergrowth during the pandemic are also feeling the consequences. Nevertheless, the tech sector is expected to continue to grow modestly, and experienced tech professionals
The Great Purge
The tech sector has been hit hard by layoffs in recent months, and the web3 sphere is no exception. Magic Eden, the leading marketplace for Solana NFTs, announced this week that it was laying off 22 employees as part of a company-wide restructuring effort. This news comes as the wider crypto economy continues to struggle through a difficult winter.
The tech sector has seen a rise in layoffs in 2023, with big tech companies such as Amazon, Microsoft, Google, IBM, Salesforce, and Facebook parent company Alphabet all announcing job cuts. The COVID-19 pandemic had sparked a tech buying spree, causing these tech giants to go on a hiring binge, but now they face declining revenues. Smaller tech firms that were caught up in pandemic-generated hypergrowth are also facing consequences. Despite the increase in IT spending in 2023, the overall increase is expected to be modest, with hardware sales forecast to decline. Other factors such as supply chain issues, inflation, and the war in Ukraine are also impacting both business and consumer spending and leading to fears of recession.
According to data compiled by Layoffs.fyi, an online tracker of job losses in the technology sector, tech companies have laid off 101,657 workers in the first six weeks of 2023, which is equivalent to 64% of total tech company layoffs for all of 2022. While these layoffs are widespread across the tech sector, many of the layoffs are affecting non-technical staff, which is good news for experienced tech professionals. In fact, the lack of available tech talent has led to an increase in salaries for IT professionals, with consultancy Janco Associates predicting that salaries could rise by as much as 8% in 2023.
A bit better in Crypto
The situation in the crypto industry is not much better, with several prominent crypto companies announcing layoffs. Magic Eden recently only laid off 22 employees as part of a company-wide restructuring. Launched in September 2021, Magic Eden had quickly risen to become one of the Solana blockchain’s most popular marketplaces for NFTs, expanding into the Ethereum ecosystem in September 2022. In a letter shared on social media, Magic Eden’s co-founder and CEO Jack Lu stated that the company had to take a hard look at its structure and roles as it established its priorities for 2023.
In 2023 alone, several prominent crypto companies, including Huobi, Coinbase, Blockchain.com, Crypto.com, and Luno, have all announced layoffs of their own. Magic Eden, which launched just a year ago, quickly rose to become one of the most popular marketplaces for NFTs on the Solana blockchain, and later expanded into the Ethereum ecosystem as well. Despite its impressive growth and $1.6 billion valuation, the company has found it necessary to restructure its workforce.
Jack Lu expresses gratitude
In a statement on Twitter, Magic Eden’s co-founder and CEO, Jack Lu, expressed his gratitude for the employees who were affected by the layoffs and emphasized that the company would be treating them with the utmost care and respect. Lu also wrote a letter in which he explained that as the company grew, the challenges it faced changed, and it was necessary to take a hard look at what structure and roles were needed to achieve its strategic goals for 2023.
To support those affected by the layoffs, Magic Eden is offering two months of severance pay, removing the one-year vesting requirement for stock options, allowing them to keep their laptops, and providing healthcare coverage for another six months.
In conclusion, the tech sector is facing a challenging year, with layoffs affecting companies of all sizes and across all areas of the industry. The web3 sphere is no exception, as even high-flying companies like Magic Eden are having to restructure their workforces to meet the demands of the current economic climate. While the situation is difficult for those who have been affected by layoffs, the tech sector is expected to continue to grow modestly, and experienced tech professionals are in high demand and can expect to see their salaries rise.
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