The cryptocurrency sector, particularly in India, is currently undergoing a turbulent period that is projected to have far-reaching consequences. One of the notable casualties of this upheaval is the Indian crypto unicorn, CoinSwitch, which has recently announced job cuts affecting their customer support and operations teams. The decision has reportedly been driven by a surge in redundancies attributed to a decrease in customer inquiries as a result of lower trading volumes spurred by a sustained bearish market.
Employee dismissals at CoinSwitch has touched 44, primarily targeting roles that have become extraneous in the current climate. This was not a spontaneous decision, as the laid-off employees voluntarily resigned after a series of in-depth discussions with their managers. In addition, severance pay of up to four months has been extended as a gesture of support to the affected employees. It also showed a commitment towards reabsorbing these employees should the trading volumes increase and new roles become available.
This policy of staff reduction does not seem to be peculiar to CoinSwitch alone. Crypto exchange CoinDCX, another significant player in the Indian crypto space also implemented workforce cuts of 12% less than a week prior, guided by the increasing crypto taxation and Tax Deducted at Source (TDS) in the country.
Notably, CoinSwitch has been employing a half-yearly appraisal system, dispelling rumors of quarterly assessments purportedly leading to staff cuts. It also interesting to note that despite the cutbacks, the company’s workforce increased by over 60 since April, according to a reliable internal source.
These successive layoffs are unfolding at a time of a downward trend in the crypto ecosystem. The situation in India has been further excruciated by the government’s high cryptocurrency tax rates. Whether it’s a 30% tax on profits from virtual digital asset sales or a 1% tax deducted at the source, the impact has manifested as an estimated 85% dip in daily trading volumes.
Late last year, WazirX, another Indian exchange, laid off around 40% of its staff, mirroring similar actions by global giants such as Coinbase, Binance, Polygon, Dapper Labs, and Genesis.
While it’s important to remain optimistic about the future of blockchain technology and markets, these developments point towards an increasingly uncertain landscape, particularly challenging for countries like India with their rigorous crypto tax regimes. It’s a significant subject of concern for crypto enthusiasts, raising questions about the legitimacy of crypto exchanges and the sustainability of the crypto industry in its current form.