"AI is the main reason for our layoffs." This is almost the standard explanation given by companies today when they carry out layoffs.
In the first half of 2026, nearly 140,000 people were laid off in the U.S. tech industry. Amazon let go of 9% of its workforce, while Meta laid off 10%. The reasons they provided for the layoffs were almost identical: AI is transforming everything, and companies need to streamline.
In fact, in 2026, over 56% of layoff events explicitly cited AI, automation, or machine learning as the reason. AI has been the leading cause of layoffs in U.S. companies for four consecutive months. Ironically, almost 60% of companies admit that they have packaged layoffs or slowed down hiring as "AI-driven," when the real reason is financial pressure.
The impact of AI is not limited to Silicon Valley; it is reshaping the employment structure of almost every industry. The Web 3.0 industry, as a crossroads of technology and finance, is particularly hard hit. The scale of layoffs in the Web 3.0 industry has been ongoing for the past six months, and it is unusually intense and rapid.
Starting from this year, especially in recent months, news of top-tier trading platforms being dismantled, team restructuring, and personnel turnover has been intensively discussed on platforms like X, Reddit, Xiaohongshu, Maimai, and in industry professionals' coffee chats. Once-prominent platforms like BitMEX have almost faded from the mainstream view, while smaller platforms are exiting or downsizing their business lines. In a now AI-dry talent and attention market, layoffs in the Web 3.0 industry seem to be the inevitable choice.
The Sword of Damocles Falls
When Kevin received his layoff notice, his Last Day was only three days away.
Kevin had previously worked at a major Internet company for several years, but was later drawn to the high salaries and narrative of the Web 3.0 industry, so he switched to join a top-tier trading platform. Only later did he realize that his layoff had actually been decided over a month ago.
During that time, he hardly sensed any signals of being laid off. All work proceeded as usual, meetings went on, and messages were replied to. It wasn't until HR approached him, without any reasonable explanation, no signs of poor performance, but the sword of layoffs still fell on Kevin's head.
In hindsight, the only hint was that their original group of ten had already lost two members before him. At the time, everyone's reasoning was "not a good fit" or "found another job that's less stressful." "Looking back now, that might have been the time when they were already being pushed out," Kevin told Rise BeatZ.
Richard's experience at the small trading platform was more extreme. After nine years as a full-time dad, he reentered the workforce and landed a job at a relatively small crypto exchange. However, he, along with many colleagues, was soon laid off.
According to his account, one morning, he turned on his computer as usual to start work, only to find that his system access had been revoked. Initially thinking it was a technical glitch, he then checked the work group chat and saw around forty colleagues all asking the same question: "Why can't I log into my account?" No one knew what was happening. As everyone looked at each other in confusion, panic spread through the chat. It wasn't until a few hours later that they received a cold email in their personal inboxes notifying them of immediate termination.
What further chilled Richard was another incident. Shortly before the layoffs, his manager had hinted that one of his development colleagues "might need to be adjusted." Richard was actively trying to help this colleague stay on, even rearranging work assignments to prove the person's indispensability. Before he could submit his proposal, both individuals found themselves facing the same layoff fate.
Another former employee in the crypto trading platform, Xiaoyu, described a similar layoff scenario to Rise BeatZ. In her previous company, the first step of the layoff process was mass deactivating employees' Slack accounts and revoking email access. "Every time we saw someone suddenly disappear from Slack, we would rush into private chat channels, scrambling to exchange phone numbers and LinkedIn links," Xiaoyu said, "because we didn't know who would be next, everyone wanted to stay in touch while they still could."
"When the layoff finally hit me, my manager messaged me on Slack asking if I had a moment to take a call," Xiaoyu said, "Before I could even reply, all my permissions were revoked."
Layoffs Like Tornadoes
Kevin revealed that in the months after his departure, the team continued to experience layoffs, now down to only two members. His trading platform typically lays off around 10% of its workforce every quarter, totaling a 40% reduction over the year.
In May, Coinbase announced a global layoff of about 700 employees, officially termed as "AI-first restructuring," representing around 14% of the workforce. However, according to Rise BeatZ's insider sources, the impact on Coinbase's India office far exceeded this number. Former employees stated that about 90% of the India office staff had left, covering all business functions, not just sales. Only a handful of the most elite engineers were invited to relocate to Canada to continue working.
It is said that the main reasons for the large-scale layoffs in the India office were high costs and significant time zone differences with the United States. Coinbase paid around 7.5 million Indian Rupees to Indian SDE2 (Senior Developer Engineer), equivalent to about 110,000 Canadian Dollars, which is comparable to the salary of a local Senior Developer Engineer in Canada. In most high-paying product companies, the salary of Indian architects is even higher than their EU counterparts.
Many trading platforms have been exposed for unsuccessful negotiations between employees and HR regarding compensation packages, leading to employees being informed on the same day that it was their last working day and having their system access revoked. The recent closure of the BitMart trading platform saw entire departments being laid off starting in May.
Furthermore, many trading platforms choose to conduct layoffs at specific time points, which is not coincidental. According to industry insider BeatZ, around June 30th is a peak period for industry-wide layoffs. The reason is simple: financial reports for July are upcoming, and these data are to be presented to investors. By laying off a group of people and reducing expenses, the profit and loss statement immediately looks better. For the management of trading platforms, layoffs are not just about cost reduction but also about financial narrative management. A streamlined report presented to investors is more convincing than any explanation.
Not only the trading platform where Kevin and Richard are employed, but almost all Web 3.0 industries are experiencing large-scale layoffs, and only a few severance packages are fair and satisfactory.
Several interviewees in the previous section experienced similar situations, where the trading platform acted swiftly to cut off contact and access rights during the layoff process: "Everyone's contact information is there. Without these permissions, we don't even have a channel to fight for our rights."
BeatZ learned from insiders that operational and product positions that worked in physical offices or overseas offices received normal transition time and compensation during the layoffs, "but many technical positions are remote, so they just let you go directly, quickly, which doesn't affect them much."
Since many IT positions are held by employees in their home country, while the trading platform is registered overseas, "you are not there, and the personal cost of enforcement is very high. It's just that bit of money, doesn't affect your life, so most people don't want to or can't bother to argue."
Even with a few days of buffer time, the situation for employees is still unfavorable. During the exit procedure communication, HR asked Kevin to fill in the reason for leaving in the system and persuaded him not to choose "company dismissal."
"They would say, if you select company dismissal, your reference check will not pass, and they will speak ill of you. So they force you to choose personal reasons for leaving." By choosing to leave for personal reasons, the company does not need to provide any additional compensation.
Kevin ultimately did not receive any severance pay. The company only settled his final day wages and overtime pay. Kevin later reflected and realized that there were some signs during the period before his layoff that he had not understood at the time. For example, the alignment with his direct supervisor had become less smooth, and he could clearly feel that the supervisor was not as fond of him as before. However, in an organization that operated at high speed every day, these subtle changes were easily overlooked until the moment of truth.
During a large-scale layoff period, major trading platforms were trying every means to make layoffs appear less like actual layoffs.
For example, rumors have it that BeatZ, to which many interviewees have attested, would send out pre-configured computers to new employees. These computers were equipped with a sophisticated monitoring system that could track employees' keyboard input frequency and mouse click behavior, which would then be used in performance evaluations.
It is said that an employee of a trading platform was once fired because they watched an iQIYI drama on the company-issued computer for a while.
Another common practice is to first set almost impossible KPIs for employees. Then, after the assessment period, employees are dismissed under the reasons of "unsatisfactory performance" or "failure to meet company standards." This way, layoffs are disguised as performance-based terminations, and the company does not have to pay additional compensation.
A former trading platform employee disclosed on X that during one round of layoffs, the platform held regular tests on "Web 3.0 industry knowledge" and made it a compulsory part of the KPI assessment. If an employee failed the exam, they faced the risk of immediate dismissal.
This widespread wave of layoffs swept in like a tornado, but because everyone had been under intensive surveillance for so long, they tacitly avoided discussing the elephant in the room.
In the Whirlwind of Rumors, All Are Mute
Compared to those who were swiftly laid off, the ones who remained were not necessarily luckier.
Xiaoyu mentioned that after each round of layoffs, the survivors would actually envy the departed colleagues because at least their fate had been determined. The ones left behind lived every day like skittish birds, never knowing if they would be the next ones. Since the layoffs began, she could distinctly feel that the work atmosphere had become extremely negative, filled with an inexpressible sense of despair, and she couldn't muster the enthusiasm for anything.
Richard also noted that there had been subtle changes in the work atmosphere during the layoff period. While the team had always worked at a fast pace with intense pressure and rapid product iterations, most of the time spent was on actual work—product updates and feature iterations. However, the current busyness was entirely different, more geared towards meeting the management's fabricated objectives. The company intensified its evaluation mechanism, required hourly check-ins, and increased meeting frequency.
The "stand-up meeting" culture on the trading platform was taken to an extreme during the downsizing period. The original intention of a stand-up meeting was to make the meeting quick, as standing for a long time is uncomfortable and encourages concise communication. However, according to Richard, at his trading platform, this tool meant to increase efficiency turned into a drain: they had to have two stand-up meetings a day, yet no one knew the direction the product was supposed to take.
With three project managers changing in six months, the product management team was almost empty. Many people had ongoing projects, but because key project members were suddenly fired during the day, sometimes even just minutes before a meeting, all these tasks had to come to a sudden halt.
Richard described that there were even outsourced teams in his trading platform, and unbelievably, these outsourced personnel were paid even more than the full-time employees. It wasn't until Richard later had face-to-face discussions with two colleagues that he found out the reason was that some executives had withheld the employees' raises for two years.
Richard believed that the management was not concerned about cost control because what they truly cared about was not technology and product but power and control.
Kevin felt the same way. He increasingly felt that the trading platform he was in was like a sluggish state-owned enterprise. Against the backdrop of frequent security incidents in the overall cryptocurrency trading platform industry, instead of receiving more resources, the technical team of the trading platform had become extremely cautious: they aimed not to excel but merely to avoid mistakes.
"No one dares to take risks anymore; they just want their own work to be error-free; it feels like a state-owned enterprise as a whole," Kevin said.
Prior to being laid off, John, who grew up abroad, had long lost patience with such a work environment.
He had noticed the heavy emphasis on "Chinese culture" in the company since he joined. Chat records, JIRA, meeting minutes, and almost everything were in Chinese. Foreign employees who were not proficient in Chinese would feel excluded. The work atmosphere was extremely harsh, the pace was fast, and there was a quarterly performance review.
Due to the team being in different time zones, being online at unusual hours was common. John mentioned that his team's weekly stand-up meeting was scheduled for Sunday evenings, "My weekend plans always had to end early." His QA testing colleague was in the U.S. time zone and often messaged late at night.
"We are always on call 24/7," John said, often seeing colleagues submitting code at 2 a.m. on a Saturday, "There is simply no work-life balance; the pace of life here is more like work, life, and work again."
The Forbidden City of Power Play: Line of Succession and Black Sheep
Richard joined the company during its heyday and witnessed the entire rise and fall of the company. What struck him the most was the "power play" among the management of the trading platform, which was more naked and chaotic than any other office politics he had seen.
Within his company, the partners faced a severe trust crisis due to government investigations and potential legal issues. One side's CTO/CFO felt deceived by the other partners or that they did not receive the necessary support when facing government issues. Eventually, the partners went their separate ways and announced a split.
One party, along with a core team and a senior staff member, formed a "Board of Directors" and established a new company to become the actual developer of the old product. Those who were once called friends became mere client relationships within a month. By February, the new company was advancing its business at a pace of two new products per week. All of this happened around the time Richard was resigning.
In this high-level power struggle, the rank-and-file employees had neither the right to information nor the power to choose. They were all sacrificial pawns in the internal strife and turmoil of the company.
In the Web 3.0 industry, many project founders and even CEOs of trading platforms are merely figureheads. This is an open secret within the industry, understood by almost all practitioners. The real decision-makers often operate behind the scenes, and the primary quality required of those in the spotlight is not innovation or technical prowess but loyalty.
"Toxic culture is top-down and permeates through. In this system, those who can survive are likely the same kind of people. If you climb up the ladder, you will definitely be alienated into this environment. If you are not such a person, you won't be promoted," analyzed Kevin. "People promoted are almost always skilled in politics, excel at managing upwards, and are dominant over subordinates."
As for those considered black sheep, they are gradually pushed out by the executives using various means. First, they are excluded from meetings, and key decisions are made without their involvement. Then they are moved to peripheral roles, far from the core business. Next, they are told not to submit reports or given new tasks. By the time their replacements are ready, they finally realize they have been sidelined.
"So the entire system is very toxic," Kevin said. "You can look at Glassdoor; everyone thinks colleagues are nice, willing to support each other, and have good personalities. But the whole system feels like the Forbidden City. You cannot speak ill of your superiors and must watch your rhetoric."
A Failing Nest
"I think the entire Crypto business model has already collapsed," Kevin said.
The core revenue of exchanges in the past relied on two things: trading fees and listing fees. When the market was hot, new projects poured in, retail investors swarmed to trade, and both trading and listing fees skyrocketed, leading to team expansion. "But now all the projects that have been listed have been proven, they all just want to make money and leave."
The issue of listing fees is equally severe. According to Kevin, exchanges charge project teams exorbitant fees, with a small project having to pay hundreds of thousands of US dollars just to be listed, while the project's market value after listing may only be a few tens of millions of US dollars. "Exchanges have killed the entire ecosystem. On the one hand, the cost of starting a business in the coin circle is too high, and on the other hand, retail investors are not picking up the tab anymore." In his view, this is a downward spiral process, with a decline in project quality, more projects breaking their listing prices, retail investors exiting, trading volume shrinking, fees decreasing, and listing fees being forced to rise.
The rise of on-chain derivatives platforms like Hyperliquid has put centralized exchanges in an even more passive position. The most profitable derivatives trading segment of centralized exchanges is no longer confined to their own system.
The market's impact is also accelerating this downward spiral.
Many interviewees all mentioned last year's October 10th event, a large-scale industry-wide liquidation event, which had a profoundly negative impact on the industry, shaking the confidence of all practitioners. All positions with leverage exceeding two times were forcibly closed on that day, and retail investors were slaughtered, unable to recover to this day.
Beneath the falling nest, can there be any unbroken eggs? No one can thrive alone. The plight of exchanges ripples out to the entire industry.
John told Rising BeatZ that many medium-sized Web 3.0 institutions with assets under management between one and five billion dollars are shutting down, as old financing and DeFi yield strategies are becoming increasingly unsustainable. Since last summer, the liquidity situation in the cryptocurrency market has been "very dire." Basically, all the meme coins launched in early 2025 are heading towards zero, with very low book value. Off-exchange trading volume is bleak, and in terms of market-making, apart from RWA-related business, there is hardly anything worthwhile. A friend of John's who is a market maker doing a crypto-neutral strategy once told him that even though they improved their strategy to increase market share and profit per trade, the company's overall profit still plummeted significantly, with profits generally shrinking to about 30% of what they used to be. His friend was eventually laid off as the company cut costs.
Not only market makers and quantitative institutions, Kevin mentioned in the interview that currently VCs in the Web 3.0 industry are very cautious in both investment amount and number of investments, basically in a state of not investing. Even if they do, the amount has been significantly reduced compared to before. "In this cycle, VC investment has decreased by 80%. Not many people are investing in crypto. So, in the next bull market, there won't be many good projects for retail investors to list."
The situation of project teams is equally difficult. Kevin's assessment is: "Except for some projects in the B2B sector that have Web 2.0 revenue, the vast majority of projects have no B2B revenue or C2C revenue at all."
Crypto is Like a Roach Motel
Good birds choose wood to nest, but for those kicked out of a crypto exchange, the problem is not about choosing wood, but whether there is any wood left to choose.
After leaving the exchange, Kevin joined an AI-related startup. He is not alone. According to Rising BeatZ, the majority of professionals who have left the Web 3.0 industry have flocked to the AI industry. This is not hard to understand: AI is the hottest track right now, with active fundraising, abundant positions, and many similarities in channels and attributes with the crypto industry. Both emphasize growth, user acquisition, and global operationalization, and many skills can be directly transferred.
Richard's disappointment with the Web 3.0 industry is even more thorough. In his view, the exchange where he worked was filled with incompetence from top to bottom, from partner infighting to frontline staff's incompetence. "Even today, people in the cryptocurrency circle are still a group of self-righteous, arrogant individuals." He later turned to the AI industry and completely left the crypto world.
In contrast, there are not many people who have truly transitioned to traditional industries. A small number of technically skilled trading system and risk control talents have entered traditional market makers and quantitative companies. There are also some operations, BD, and compliance personnel who have entered the traditional brokerage system as the Hong Kong and U.S. stock markets have become active, but these are the minority. The fate of many laid-off exchange employees still flows to the next tier of small exchanges.
Because of the discrimination of the traditional industry against the Web 3.0 industry, it is deeper than many people imagine.
Rising BeatZ learned from some traditional financial HR departments that when they see candidates who are still working at Web 3.0 companies on resumes during the recruitment process, they will directly eliminate them. In the stereotyped image of many traditional financial practitioners, the crypto industry is like a huge "roach motel," implying a regulatory gray area, a speculative culture, and unverifiable performance. Anyone coming out of here inherently carries original sin in their eyes.
Even within the AI industry, there is a similar bias. Some AI companies that focus on developing large models and infrastructure are also skeptical of candidates from a Web 3.0 background. In their view, the "growth" of the Web 3.0 industry is more based on speculation and narrative rather than real technological barriers. Someone with operations experience in a trading platform is seen in a completely different light than someone with operations experience at ByteDance, in the eyes of an AI company's HR.
Perhaps this is the most profound price paid by Web 3.0 professionals who have experienced layoffs.
This Winter Is Colder Than Ever
Every industry goes through cycles. But the current cold spell in the Web 3.0 industry may be different from the past.
Compared to the past, the competitive landscape in the cryptocurrency field has undergone a complete transformation. Prediction markets such as Polymarket and Kalshi, as well as retail brokerage trading, are all vying for the same pool of retail investors' funds. Money from U.S. retail investors is flowing into AI stocks and prediction markets rather than back into the crypto market.
Some professionals even believe that the current situation is worse than the crypto winter of 2022. At least in 2022, there were still retail investors present, but now, the massive liquidation on October 10 has wiped out all the remaining leveraged retail traders.
Whether an industry is youthful or elderly is not only about its income but also about what it is fighting for.
Even in such a "shrinking" market, the competition and underhanded tactics between various trading platforms have not stopped. According to sources familiar with the matter, the HR departments of some trading platforms have even listed "poaching high-salary employees from competitors" as a KPI indicator, hiring them away with high pay only to lay them off a few months later for various reasons, disrupting the rhythm of competitor teams, gathering intelligence and customer resources, and treating the poached individuals as disposable tools.
This reminds the author of the food delivery war in the internet industry a few years ago, where the smartest group of people spent billions in profits on mutually destructive activities. Alibaba, Meituan, and JD.com, the three Chinese internet giants, spent over 220 billion RMB, approximately $31 billion, on delivery subsidies in just two quarters, nearly equal to the total spent globally by all companies on generative AI in a whole year.
Today's cryptocurrency trading platforms are replaying the same script. The entire industry's pie is shrinking, retail investors are leaving, trading volumes are contracting, but each platform continues to sabotage one another by poaching employees, engaging in public mudslinging, and waging wars of attrition.
In the past, we have always attributed the large-scale layoffs in the transaction platform to the cyclical nature of the Web 3.0 industry and the impact of the AI industry. As mentioned at the beginning of the article, in 2026, AI was cited as the reason for more than half of the tech layoffs, but nearly 60% of companies admitted that the real reason was actually financial pressure.
The Web 3.0 industry is no exception.
Charging project teams hundreds of thousands of dollars for listing fees; listing a large number of low-quality tokens, causing retail investors to lose almost all of their investment in repeated price collapses; using opaque performance evaluations and monitoring systems that erode employees' trust and creativity; in the midst of a cold winter, failing to consider new business models and instead focusing resources on outcompeting rivals.
If today's Web 3.0 industry winter is not the inevitable fate of cycles. Then, whose fault is the decline of the Web 3.0 industry?
Welcome to join the official BlockBeats community:
Telegram Subscription Group: https://t.me/theblockbeats
Telegram Discussion Group: https://t.me/BlockBeats_App
Official Twitter Account: https://twitter.com/BlockBeatsAsia
