Binance begins layoffs as top crypto exchange reevaluates ‘whether we have the right talent’

On Wednesday, the independent reporter Colin Wu tweeted that Binance could be laying off as much as 20% of its 8,000 employees. In response, a Binance spokesperson told Fortune in a statement that “this is not a case of rightsizing” but a focus on “whether we have the right talent.”

“We will still be seeking to fill hundreds of open roles,” the spokesperson said. “This will include looking at certain products and business units to ensure our resources are allocated properly to reflect the evolving demands of users and regulators.”

While Binance has retained its crown at the top of the centralized exchange ecosystem, its dominance has taken a hit as crypto prices fall and regulators encircle the firm. In March, the Commodity Futures Trading Commission sued Binance, arguing that the company was illegally offering services to U.S. customers. The agency’s extensive complaint included allegations of money-laundering violations.

The Department of Justice is also targeting the exchange, with hopes dwindling that the company and its enigmatic founder, Changpeng Zhao, may be able to reach an amicable settlement. Meanwhile, Binance’s market share has taken a hit, dropping to a low in April after halting certain no-fee trading.

Despite the turmoil, Binance had been able to avoid the staffing cuts seen elsewhere in the sector, announcing in early March that the exchange was “not planning any layoffs” and expected to fill another 500 roles by the end of June.

Patrick Hillmann, Binance’s chief communications officer, tweeted that “Binance is not cutting 20% of employees as a cost-cutting measure.”

Let me provide some additional clarity via 🧵.

Binance is not cutting 20% of employees as a cost-cutting measure. @binance experienced true exponential growth these past 5 years — and grew its staff accordingly. This was a historic operational challenge to overcome. https://t.co/Awmh8PdT8j

— Patrick Hillmann (@PRHillmann) May 31, 2023

“Since joining Binance, we have regularly gone through a talent density audit and resource allocation exercise every six months or so,” he wrote. “This is a cyclical process.”

The company did not disclose how many people would be let go, with Hillmann saying the priority is to streamline talent: “This has frankly been part of Binance’s secret sauce.”