Layoff Saga Continues: Crypto Exchange CoinSwitch Fires 44 Employees

The layoff saga continues to unravel for the Indian startup ecosystem. Now, Tiger Global-backed crypto exchange CoinsSwitch has laid off 44 employees as part of a restructuring exercise.

As per the startup’s LinkedIn, it employs 519 people which would mean that 8% of the CoinSwitch’s total employee base has been impacted by the layoffs.

A CoinSwitch spokesperson confirmed the development to Inc42, stating that the layoffs predominantly impacted  the customer support team. As per the company, the layoffs at the company took place earlier this month with impacted employees ‘voluntarily resigning’ from their positions. 

“We continuously evaluate our business to stay competitive, prioritising innovation, value, and service for our customers. To that end, we right-sized our customer support team to align with the present volume of customer queries on our platform. This impacted the roles of 44 members of our customer support team, who voluntarily resigned from their roles after a detailed discussion with their managers earlier this month,” said a CoinSwitch spokesperson.

However, according to a Moneycontrol report, the company has also laid off employees in the operations department. Several positions including team leads, agents, support staff, senior managers and quality analysts were also impacted by the layoffs, the report added citing an employee.

In response to this, the company said, “At CoinSwitch, we embrace a flat organizational structure with minimal hierarchy. As an example, our Head of Customer Support directly reports to the COO. Our Customer Support team is also sometimes referred to as the Customer Operations team. There is no separate operations team for our Virtual Digital Assets Business.”

Meanwhile, a source familiar with the developments revealed that CoinSwitch has hired 60 employees since April and was actively recruiting for various roles. The person further claimed that the crypto exchange still has a funding runway of five years.

Launched in 2017, CoinSwitch has raised over $300 Mn since its inception from the likes of Andreessen Horowitz (a16z), Tiger Global, Sequoia Capital India, Ribbit Capital, Paradigm, and Coinbase Ventures. As of May 2023, the crypto exchange had 13 Mn users.

The layoffs come at a time when the entire crypto ecosystem has been reeling under the impact of the government’s heavy taxation posture towards the industry. Be it 30% tax on gains from sale of virtual digital assets (VDAs) or 1% tax deducted at source (TDS) for all cryptocurrency transactions worth INR 10,000 and above, the crypto industry has been mired under regulatory uncertainty. 

This heavy taxation regime has more or less dissuaded the general populace and has led to sharp drop in volume in the range of 85-90%. The collapse of the crypto giant FTX also added fuel to the fire, raising questions over the legitimacy of crypto exchanges. 

Back home, crypto exchanges have seen multiple raids by enforcement agencies even as WazirX’s cofounder Nischal Shetty publicly sparred with Binance’s CEO Changpeng Zhao over alleged acquisition of Zanmai Labs in 2019. 

Meanwhile, the industry has seen three crypto startups shutting shops, including Pillow, Flint Money, and WeTrade. Just last week, another crypto unicorn CoinDCX also slashed 12% workforce citing macro conditions in the prolonged bear market and the impact of TDS on domestic exchanges resulting a dip in the startup’s overall revenue.