The crypto and tech labor markets are in a strange place right now—but not in the same way. If you listen to Federal Reserve Chair Jerome Powell, you’d think the labor market was thriving across the board. In an interview at the Economic Club of Washington, D.C. earlier this month, he said, “The labor market is extraordinarily strong.” At a glance, U.S. federal data appears to back that up. The Department of Labor said that total payroll employment, not including agricultural workers, is up by 517,000 in January. Overall, unemployment rates remained steady at 3.4%, continuing their slow decline since October of 2022. Hospitality, government employment, healthcare, and construction are among the industries seeing job growth.

However, the numbers and headlines from the crypto and tech industries paint a very different picture. In January alone, crypto layoffs already affected 2,806 employees, according to CoinGecko data. That’s a big number considering that 6,820 crypto workers lost their jobs in all of 2022. Huobi, Crypto.com, Coinbase, Gemini, Genesis, and Wyre are among the crypto companies that made big cuts last month, with Magic Eden, Polygon, Chainalysis, and Bittrex laying off staff in February. There have also been some “quiet layoffs” happening, according to Denise Carlin, Head of People at Web3 startup MPCH Labs, with two firms saying goodbye to over 20% of their employees without much press. Dan Eskow, Founder and Talent Partner at Web3 recruiting firm Up Top Talent, has also seen such cases.

Many crypto’s layoffs over the past year have occurred directly following unique, industry-shaking events, such as the Terra LUNA crash of May 2022 and the FTX bankruptcy filing of November 2022. But January’s layoffs don’t exactly have a clear, singular causal event. The continued labor market tightening in the crypto space is the result of unrelenting industry concerns, including Genesis’s bankruptcy, Gemini shuttering its Earn program amid its battle with DCG, Kraken ending its staking offering, and increased regulatory pressure in the U.S. Crypto is also affected by the same macroeconomic conditions threatening big tech companies. While Google’s Web3 team was notably not impacted by CEO Sundar Pichai’s January decision to lay off 12,000 workers, entire software engineering teams and Google’s startup incubator team at Area 120 were among those laid off by the tech giant.

As the crypto and traditional tech industries cope with ongoing waves of layoffs, is Web2 talent trying to make the jump to Web3? According to Up Top Talent’s Dan Eskow, yes, ex-Meta, Amazon, and Google staff are interested in crypto jobs. But due to the specialized skills and coding languages needed for crypto roles, crypto-native devs will take precedence—especially if they also have connections in Web3. Denise Carlin, Head of People at MPCH Labs, believes it’s a great time to move from Web2 to Web3 since the Web3 talent pool is comparatively “very junior.” Web3 recruiting has relied on the practice of “headhunting” during boom times.

But now that the crypto market has cooled off, hungry venture capitalists in search of the next big thing in tech may be looking elsewhere—toward artificial intelligence (AI). Clarence Thomas, cofounder of crypto recruiting firm FinBlock Staffing, told Decrypt that he’s seen candidates lose out on job offers because venture capital that was initially pledged to a crypto firm went to an AI firm instead. Up Top Talent’s Dan Eskow has seen ongoing demand for Web3 talent in the DeFi space, while FinBlock Staffing has partly pivoted away from crypto hiring as demand has lessened in the bear market. Hedge funds are still hiring for sales roles, however.

The crypto labor market remains uncertain for 2023. Georgetown Associate Professor Jim Angel has a tale of two crypto labor markets: one consists of traditional tech and financial firms, and the other are what Angel calls “wildcat firms” pushing forward with crypto tech and innovation no matter the cost. Stanford’s Jeffrey Pfeffer believes that some of the tech industry’s layoffs may be due to “copycat behavior,” while Pfeffer has a different view when it comes to crypto: “Crypto has a different problem—it is an industry based on vapor, hope, and B.S. for the most part.” In contrast, Angel believes the crypto labor market will follow cryptos in general, with the flaky stuff fading away and the productive sides growing and maturing.

The crypto and tech labor markets are in a strange place right now. The numbers and headlines from the crypto and tech industries paint a very different picture, with crypto layoffs already affecting 2,806 employees in January alone. There have also been some “quiet layoffs,” and Web2 talent is trying to make the jump to Web3. However, venture capitalists may be looking elsewhere—toward artificial intelligence (AI). Dan Eskow has seen ongoing demand for Web3 talent in the DeFi space, while Clarence Thomas has seen hedge funds still hiring for sales roles. Georgetown Associate Professor Jim Angel has a tale of two crypto labor markets, while Stanford’s Jeffrey Pfeffer believes that crypto is an industry based on vapor, hope, and B.S. for the most part. The future of the crypto labor market remains uncertain for 2023. #crypto #tech #layoffs #AI #recruiting

You can read more about this topic here: Decrypt: Crypto Labor Market Trends Don’t Echo Traditional Tech, Hiring Experts Say

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