Binance, the world’s largest cryptocurrency exchange, has made substantial changes to its employee benefits, citing a decrease in profits. According to recent reports from The Wall Street Journal, the company implemented these changes on June 19, 2023.
As part of the cost-cutting measures, Binance decided to end mobile-phone reimbursement, fitness reimbursement, and work-from-home expenses, among others, for its workforce. The move was attributed to the current market environment and regulatory climate, which negatively impacted the exchange’s profitability.
Additional Layoffs Could be on the Horizon
In an internal email shared by Cinneamhain Ventures partner Adam Cochran, Binance CEO Changpeng Zhao revealed that further layoffs could happen every three to six months.
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Hey @cz_binance if your layoffs weren't about cost cutting, why on June 19th did you announce on WEA that you suddenly cut extended benefits for all employees, & *tell them* it was because of "a decline in profit"?
Not exactly trust building to lie about this… pic.twitter.com/2MvP1ZPKEG
— Adam Cochran (adamscochran.eth) (@adamscochran) July 16, 2023
This statement came as a surprise to some, given that just a few days before the announcement, Zhao had publicly stated that Binance was still hiring and striving to attract more talent.
It should be noted that the company has been facing regulatory challenges in multiple jurisdictions, particularly in Europe and the United States. In Europe, the exchange withdrew from certain markets due to the lack of licenses and approvals.
Meanwhile, in the US, Binance is embroiled in lawsuits filed by both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), alleging illegal operations within the country.
Despite the ongoing layoffs and regulatory hurdles, CEO Changpeng Zhao (CZ) asserted in a company meeting on July 14, 2023, that Binance remained profitable and unaffected by the SEC lawsuit.
He reassured employees that the company was committed to defending its platform and continuing its operations. However, the uncertainty surrounding employee benefits reinstatement remains.
Binance Evaluating Future Cost-Cutting Measures
A Binance representative revealed that the company was reevaluating various aspects, including products, business units, staff benefits, and policies, to align with evolving user demands and regulatory requirements. This suggests that more cost-cutting measures might be on the horizon.
Moreover, recent layoffs and benefit cuts have raised questions among industry experts. Some employees expressed concern over the lack of transparency and abruptness of the layoffs, with termination agreements requiring strict confidentiality. Additionally, critics have questioned the allocation of Binance’s substantial revenue, especially considering its dominant position in the market.
