Binance Hires When Coinbase Cuts Employment amidst Crypto Winter

Binance, one of the biggest crypto exchanges, wants to continue its hiring spree in 2023 and boost employment by 15-30% in 2023, according to Changpeng Zhao (CZ), the company's CEO. The declaration comes just a few days after reports that Coinbase, the exchange's largest competitor, plans to cut its workforce by 20% and stop the bulk of its operations in Japan.

Binance Wants to Continue Headcount Increase

Speaking at a cryptocurrency conference in Switzerland, CZ said that Binance had increased its workforce to around 8,000 in 2022, having previously employed 3,000 people. However, the exchange has no intention of stopping there and wants to add another 15-30% to its workforce in 2023. It means that Binance is targeting to hire another 1,200 to 2,400 people.

"We will continue to build and hopefully we will ramp up again before the next bull market," Zhao said during the Crypto Finance Conference in St. Moritz. CZ admitted that his crypto exchange is currently "not super efficient" and must prepare better for the next crypto upward cycle.

Binance is looking to build its headcount when other major cryptocurrency firms, including its main rival Coinbase, are reporting significant cuts. It comes in the wake of the collapse of the cryptocurrency exchange FTX.

However, CZ seems to downplay the problem, to which its exchange might contribute. Binance sold its native FTX tokens, FTT, last November, exacerbating the platform's liquidity crisis. CZ admits that FTX caused some damage to the crypto market, but not enough to be permanent.

Coinbase Lays Off 950 People, Stops Operations in Japan

Earlier this week, cryptocurrency exchange Coinbase announced its plans to reduce its current workforce by 20%, or about 950 positions. This is part of the restructuring campaign, expected to be completed by the end of the second quarter. The reorganization may cost the company $149-164 million but is expected to reduce costs in the longer term.

Cessation of the operations in Japan is another part of the current headcount reduction and cost-effective cuts. The move comes despite the loosening of cryptocurrency regulations in the country, which has prompted rival Binance to re-apply for licenses in that Asian state.

Coinbase's problems triggered by the prolonged crypto winter, falling Bitcoin prices and the FTX collapse are not isolated cases. In November, another major cryptocurrency exchange Kraken announced that it was laying off 30% of its staff. This year, Huobi made a similar announcement, looking to reduce its headcount by 20%.

Although these moves look harsh for the industry, they are not a complete surprise. The cryptocurrency market in 2022 wiped off $1.4 trillion in value, and the high-profile collapses of FTX and Terra caused a significant drop in investor confidence in centralized exchanges. More people choose to hold their cryptocurrencies in self-custody or hardware wallets.

Coinbase forecasted in December that revenue for 2022 could shrink by 50%. In the third quarter, it fell 29% to $576 million. Additionally, the exchange is facing legal challenges; in early 2023, it agreed to pay $100 million to settle the lapses that the New York Department of Financial Services (NYDFS) found in its anti-money laundering (AML), customer due diligence (CDD) and suspicious activity reporting systems.