Algorand Foundation cuts 25% of workforce, citing macro and market pressures

The Algorand Foundation (AF), the steward of the Algorand chain, is in the news after it announced it has axed 25% of its workforce. 

According to the AF, the restructuring was informed by the ongoing “global macro environment” and “broader downturn in crypto markets.”

Following the layoffs, AF now believes it is lean enough to “sustainably align” the remaining resources with the protocol’s long-term goals. 

However, the ongoing crypto rout is not affecting Algorand alone. In January, the Hedera Foundation declared some of its core functions redundant and let go of employees who handled them. 

Beyond protocols, crypto media has also been hit, with Blockworks axing its entire newsroom last year. 

Besides, pressure is also coming from AI adoption, which, like other global segments, is disrupting the crypto market labour sector. This week, crypto exchange Crypto.com let go 12% of its workforce, citing the need to position itself to rising AI capabilities. 

That said, the AF layoffs were met with mixed reactions. 

Community and ALGO reaction

As expected, a section of the community sympathized with those affected by the AF layoffs and the disrupted livelihoods. 

However, one user pointed out that the AF spent $100 million last year and yet, saw no meaningful impact.

He added, 

According to the AF transparency report, it spent about $12 million as of September 2025 after selling 66.4 million ALGO tokens. Its overall expenditure has been around $18 million per year, covering even staff, which includes 65 employees. 

However, the critic was right about lagging chain activity. Its stablecoin liquidity has been declining alongside DeFi activity, as shown by the TVL (total value locked) drop. 

Since last year, DeFi activity has dropped by half, slipping from $80 million to below $40 million. In fact, the chain’s fees have been hovering below $50 throughout last year. 

Meanwhile, ALGO was down about 10% and traded at $0.088 at the time of writing, amid a broader pullback following de-risking linked to traders’ caution after the Fed rate decision.

Final Summary 

• Algorand Foundation axed 25% of its workforce, as bear market, geopolitical tensions, and AI disrupted the labor sector in the space. 
• Algorand chain activity has slowed down with DeFi activity by half, generating less than $50 in daily average fees.