Paris-based cryptocurrency hardware wallet maker Ledger announced this week that it will be laying off approximately 88 employees, representing 12% of its 734-person workforce. This round of job cuts comes despite Ledger having raised the majority of a $109 million funding round earlier this year that valued the company at $1.4 billion.
The layoffs raise concerns that the ongoing “crypto winter” may be deeper than many expected. Ledger was previously one of the crypto industry’s unicorns and a bellwether for growth and adoption of digital assets. However, persistently low cryptocurrency prices and diminished retail interest has led to declining sales of Ledger’s flagship hardware wallets.
Crypto wallet hardware maker Ledger will lay off 12% of its workforce. The company has 734 employees and a 12% cut would mean the elimination of about 88 jobs. Previously, Ledger announced it had raised the majority of a $109 million round of funding, valuing it at approximately…— Wu Blockchain (@WuBlockchain) October 6, 2023
While Ledger cites macroeconomic challenges as the reason for the restructuring, the move signals that the company is battening down the hatches for a prolonged downturn in the crypto markets. This outlook contrasts with the previously boundless optimism Ledger had during the 2021 bull market.
The job cuts are unlikely to be isolated to Ledger either. Other cryptocurrency companies that expanded rapidly during the pandemic-fueled crypto boom are likely to follow suit with their own layoffs. The evaporation of paper wealth from the crypto market rout has dried up funding for many startups as well.
“Ledger’s decision to shed 12% of its workforce is a troubling bellwether for the crypto industry. When a leading company like Ledger, which was recently valued at over $1 billion, starts making significant cuts, it’s a sign that the ‘crypto winter’ may be far from over. For Bitcoin in particular, reduced retail interest and sales of hardware wallets like Ledger’s does not bode well. If everyday investors are unwilling or unable to purchase Bitcoin and store it securely, it raises worries about stagnating adoption. Ledger’s layoffs suggest the cryptocurrency market still has further to fall and that is a worrying signal for Bitcoin ahead of 2024 halving.” says Admir, Crypto veteran and CaptainAltcoin’s CEO
Industry analysts worry that if the downturn in digital asset markets becomes severe, it could have cascading effects on the broader crypto ecosystem. Developers and talent may flee the space for more stable opportunities, setting back innovation. Adoption of cryptocurrencies for payments and financial services may also stall if consumers lose confidence in the industry’s future prospects.
While crypto is no stranger to boom-and-bust cycles, Ledger’s retrenchment is the clearest sign yet that the current crypto winter likely has further to go. All stakeholders in the industry are hoping the chill will thaw sooner rather than later.
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