In response to macroeconomic pressures and the recent implementation of tax deducted at source (TDS) on crypto transactions, CoinDCX, an Indian Crypto exchange backed by Coinbase Ventures, has reportedly laid off 12% of its workforce. The company branded this move as a first in the history of its operations. Earlier in January, it had undergone an internal restructuring strategy without dismissing any employees.
The decision towards workforce reduction arrives at a juncture when crypto startups in India are finding it challenging to navigate the country’s uncertain regulatory landscape. A marked decrease in trading volumes this year, coupled with high crypto tax rates and the TDS, has put multiple startups in a tight spot.
Sumit Gupta, the CEO of CoinDCX, attributed the layoffs to difficult macro conditions, the ongoing bear market, and the impact of TDS on domestic exchanges. These pressures heavily impacted the company’s trading volumes and, by consequence, revenues. To adapt, CoinDCX implemented several initiatives, including direct cost optimization and pushing investments into automation for efficiency and productivity.
CoinDCX, which achieved its status as India’s first crypto unicorn in 2021 with a valuation of $1.1 billion, currently has more than 722 employees according to its LinkedIn page. The recent layoffs amount to around 80 personnel being let go. To soften the blow, CoinDCX has offered a support package to the affected employees comprising full notice period severance pay, an additional month of salary, encashment of unutilized leaves, extension of health insurance, and retained wellness benefits.
The company also took a step forward to quell anxieties about further layoffs. It clarified that they have no plans for any more subsequent team reductions, following multiple thorough deliberations with their senior management team.
Crypto regulations in India toughened stance with a 30% tax on crypto profits and a 1% TDS provision on all crypto transactions implemented since February 2022. The TDS operates as an advance tax deducted by the payer during various transactions such as salaries, rent, and professional fees. This rule significantly disrupted the Indian crypto space further confounded by increasing scams. Post the TDS implementation, Indian crypto exchanges reportedly experienced a decline of 60-70% in users.
Source: Cryptonews
