Blockchain game developer Sky Mavis has decided to lay off around 21% of its workforce. The developer behind the Axie Infinity game has decided to restructure its operations in order to realign with its long-term goals and concentrate on its core offerings.
The layoff comes at a time when the broader tech, AI, and financial world is undergoing a spree of job cuts due to various reasons.
Sky Mavis Layoffs Not Due To Budget Constraints
On 23rd November, Sky Mavis’ CEO Trung Nguyen explained in a social media post that the choice for layoff had nothing to do with the company’s financial viability or budget.
Approximately 50 employees out of the 250-member worldwide team are anticipated to be affected by the layoffs. Severance benefits and help finding new employment will be provided to affected employees.
Layoffs Come As Broader Crypto and Blockchain Markets See Job Cuts
Sky Mavis’ efforts to restructure its organization come at a time when the broader crypto market is seeing the same uncertainty, making the move in tandem with other market players.
Previously, as part of a strategic reorganization, US-based cryptocurrency exchange Kraken had announced large layoffs, terminating over 400 people, or 15% of its staff.
Additionally, the decentralized cryptocurrency exchange dYdX Trading likewise reduced its workforce, firing 35% of its employees. These cuts highlight a tumultuous time for the sector as businesses deal with changing regulatory environments and persistent market volatility.
Another big job cut in the industry came when Consensys, the firm behind the well-known MetaMask cryptocurrency wallet, laid off more than 160 workers across all departments.
Joe Lubin, the company’s founder and CEO, revealed the news in a blog post, attributing the layoffs to both legal costs from the company’s lengthy legal fights with regulators and macroeconomic headwinds.
Why Are Firms Laying Off Employees?
The market turbulence, that started in 2020, has been aggravated by not one but various factors. The economy, inflation, rising interest rates, overhiring, and the COVID-19 pandemic job correction are some of the causes that contribute to the layoffs.
However, one major reason behind the layoff spree was the contraction in economies. When reports from the U.S. Bureau of Economic Analysis revealed a contracting economy in July 2022 for the second consecutive quarter, discussions of a U.S. recession began.
Therefore layoffs became a survival tactic used by businesses to reduce expenses when revenue and profitability declined. On the other hand, many decided to cut jobs in order to streamline their operations and avoid hiring more than required.