Due to the lingering bear market and strict tax laws, CoinDCX, India’s leading cryptocurrency exchange, is reducing its personnel by 12% in a difficult move that highlights the turbulent nature of the business. A representative for the company said that the decision to fire 71 staff was a reaction to declining revenues.
The Mumbai-based exchange, co-founded by Neeraj Khandelwal and Sumit Gupta in 2018, has been a key player in the country’s evolving crypto scene. However, India’s imposition of heavy taxes on cryptocurrencies, including a 30% tax on profits and the contentious 1% tax deducted at source (TDS) on all transactions, has created a challenging environment for crypto exchanges. The TDS, introduced in February 2022, along with the global crypto market downturn, has significantly impacted trading volumes and thus, revenue.
“We have made the difficult decision to resize certain teams and to steer the business towards profitable and sustainable growth,” CoinDCX stated in a press release. The company has emphasized the impact of macro conditions on startups and businesses globally, and particularly in the crypto sector, where the bear market and TDS have taken their toll on trading volumes and revenue.
Sumit Gupta expressed his heartfelt remorse in a LinkedIn post, acknowledging the weight of the decision that led to parting ways with talented team members. The company, however, remains resolute in its commitment to navigating through the challenges and striving for a brighter future in the evolving landscape of crypto.
The situation at CoinDCX is just one facet of the broader picture within the crypto industry. Throughout the ongoing market downturn, various media reports have highlighted job losses in the sector. Nevertheless, research data suggests that the extent of job losses in the crypto industry is relatively minor when compared to the broader tech sector. A recent report indicates that only 4% of total tech industry job losses were attributed to the crypto sector.
According to the research, a mere 4,695 workers in the cryptocurrency domain lost their jobs as of November 13, positioning the crypto industry in the top 10 for tech sector layoffs in 2022. In contrast, the overall tech industry experienced a far larger job loss of nearly 100,000 individuals during the same period. These numbers put the crypto sector’s situation into perspective, revealing that sensational media headlines have blown the issue out of proportion.
It’s worth noting that the statistics account for well-publicized layoffs at prominent tech companies, including Meta (formerly Facebook) and Twitter. Meta, for instance, saw a staggering layoff of 11,000 employees, making up around 60% of all layoffs in the consumer IT sector in that year.
In light of these figures, it becomes evident that while the crypto industry is facing its share of challenges, the extent of job losses in the sector is relatively modest compared to the broader tech landscape. The narrative of job losses within crypto, while impactful for those involved, presents a more nuanced reality when seen in the context of the larger industry. As the cryptocurrency market continues to navigate the ups and downs, it’s clear that resilience and adaptation will be key in determining which players emerge stronger in the evolving landscape of digital finance.