Artificial Intelligence (AI) appears to be wreaking havoc on crypto payrolls, but are these companies really replacing humans with AI tools, or is management just trying to mask some really bad decisions?
On March 19, Kris Marszalek, CEO of digital asset exchange Crypto.com, announced that his firm was “joining the list of companies integrating enterprise-wide AI.” Marszalek warned that companies that fail to follow his lead “immediately” will fail, while those that make this human-to-AI pivot slowly/reluctantly “will be left behind.”
The warning comes too late for 12% of the Singapore-based Crypto.com’s workforce—roughly 180 people, according to the Straits Times—whose roles “do not adapt in our new world.” Marszalek claimed to be “deeply grateful” for the sacrifice made by these now-redundant cogs in his machine, who are “receiving resources to support their transition” to … something. Regardless, Marszalek said, “this new foundation sets us up for continued success.”
For the record, this is the third payroll cull Crypto.com has made in the past four years. In 2022, as a growing number of crypto firms began collapsing under their own financial mismanagement, Crypto.com sacked about 260 members of its 5,000-member team. A larger cut, roughly 20% of its remaining staff, came the following year as the post-FTX “crypto winter” officially set in.
The Straits Times quoted one laid-off staffer saying the company issued an email to staff indicating that Crypto.com was pivoting “towards key business initiatives.” Among the hardest-hit departments were “growth and customer relationship management,” so customers who enjoyed working out problems with a human service rep are likely in for a shock.
In an HR call on March 19, staff were told Crypto.com “has grown to the point where our structure has become quite layered and siloed, which has slowed us down and created inefficiencies.” The HR rep added that “we’re kind of at this critical point where we have to find ways to lean into and leverage all the new tooling and platforms and technologies that have become available.”
The layoffs came just over a month after Marszalek announced that he’d purchased the AI.com domain the previous April for the low, low price of $70 million, according to the individual who brokered the deal. That would make the purchase the highest price ever paid for a domain name.
Marszalek’s AI.com launched on February 8, offering autonomous personal AI agents to average Joes and Janes. Getting started on this “best-in-class agentic AI experience” is free, but paid subscription tiers offer “more enhanced capabilities and increased input tokens.”
Marszalek believes that pairing “the best AI tools with top-performers will achieve a level of scale and precision that was previously impossible.” But it will be worth watching to see if Crypto.com customers find their experience as precise as it was when humans were still manning the levers.
It’s perhaps worth noting that Crypto.com has donated tens of millions of dollars to campaigns and causes associated with President Trump, including $1 million to Trump’s inauguration fund and around $35 million to MAGA Inc, the Trump-aligned political action committee.
Crypto.com also agreed to provide ~$1 billion worth of its in-house CRO token to fuel the “CRO Strategy” embarked upon by the president’s Trump Media & Technology Group (TMTG) (NASDAQ: DJT). Some former Crypto.com staff are likely wondering how many of their jobs might still exist had the company not been so generous with these donations.
Drip, drip, drip
It might not match the intensity of 2022-23’s downturn, but the digital asset sector has been in a slump for nearly six months, and the market has shown little sign of shaking off its lethargy anytime soon. In that light, it’s not surprising that Crypto.com isn’t the only firm looking to reduce costs by reducing the number of warm bodies collecting a paycheck.
The day before Crypto.com’s layoff announcement, the Algorand Foundation announced that it had made “the difficult decision to reduce our workforce by 25%.” The company praised impacted staff but said the layoffs were necessary due to “the uncertain global macro environment as well as the broader downturn in crypto markets.”
Two days before Algorand’s announcement, crypto data specialists Messari “parted ways with many teammates who helped build Messari into what it is today.” That announcement was made by new CEO Diran Li, as former CEO Eric Turner was among those heading for the exit. Li said the company was “doubling down on Messari as an AI-first company serving institutions through research and AI products.”
In February, the Gemini (NASDAQ: GEMI) exchange announced plans to cut “roughly 25%” of its staff (up to 200 employees) because “rapid breakthroughs in AI” meant that “doing more with less has never been more true or possible.” Absent from that positive spin was the fact that Gemini lost $589 million last year due to its customers’ dwindling interest in crypto.
Other firms, including Story Protocol developer PIP Labs, have issued similar ‘it’s not you, it’s AI’ claims regarding their layoffs, although not everyone is buying it. The phrase “AI washing” has come to represent companies crediting/blaming AI for significant payroll reductions when the reality is that many of these companies are in cost-cutting mode due to other factors, including poor management decisions.
Embracing the AI narrative makes these managers look like forward-looking pioneers instead of stumblebums who came to believe their own hype that “number go up” meant they could expand well beyond their needs, not to mention their means, leaving them ill-prepared when the number go down (and stay down).
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Block party crashers
In late February, Jack Dorsey, CEO of payments firm Block (NASDAQ: XYZ), announced that the company was cutting 4,000 jobs, equal to 40% of its total workforce. Dorsey said “the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company.”
It’s worth noting that before Block’s layoff announcement, its share price had slipped below $50, a low not seen in nearly a year. Some of this decline was due to Dorsey’s big bet on the BTC token, which hit an all-time high price in early October and then lost nearly half its value. Block’s shares were trading over $80 at the time of BTC’s high-water mark but slid in tandem with BTC’s decline.
So Dorsey had an urgent need to change the negative narrative around his company. And it appears to have worked, at least for a time, as Block’s share price spiked up to $67 following the layoff news (they’ve since slipped back to $60).
A former Block staffer told the New York Times that the company’s payroll purge “reads like standard prioritization and cost management, not an AI-driven reinvention.” And in a twist reminiscent of Elon Musk’s ill-advised DOGE-purge of the federal government, some staff that Block fired have since been rehired after the company realized AI couldn’t do their job by itself.
One staffer, who still works at Block, told The Guardian that AI was “just not there yet” to replace workers on this scale. “There’s a distinction between what’s technically possible and just—pardon my French—whatever CEO bullshit will happen based on their own interpretation of how AI works.”
Other staff, some of whom were among those given the boot, complained that they’d suspected for months that they were being tasked with training AI models to take over their roles. One staffer claimed that Block was actively monitoring how (and how much) staff utilized AI tools, and management had made it “very clear that if you weren’t using AI, your job was in danger.”
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Use it or lose it (your job)
Regardless of whether AI is truly up to the task, it’s clear that companies will continue to explore opportunities to reduce their headcounts if AI can do the job as well or better than us ugly giant bags of mostly water.
Anthropic, the company behind the popular Claude series of large language models, published its latest Economic Index Report this week. The report reveals a growing divide between individuals who use Claude more frequently—and are therefore developing greater “AI fluency”—than those who query the AI less often.
Anthropic says “high-tenure” users (those who signed up for Claude more than six months ago) are seven percentage points more likely to use Claude for work, and four points less likely to use it for personal matters. Users who signed up over a year ago are six points less likely than new users to use Claude for personal use cases. So, the tourists are here for the lolz, the natives are here to get stuff done.
High-tenure users are also five percentage points more likely to have a ‘successful’ Claude conversation. Anthropic suggests that high-tenure users could be (a) better at prompting, (b) experienced enough to bring tasks that are more likely to be successful, or (c) “these users have better learned to extract what they want from AI. Facility with these platforms may be a key determinant of success that appears to scale with experience.”
The observed differences in success rates between more AI-comfortable users and their more timid counterparts “could deepen inequalities in the labor market … early adopters with high-skill tasks have more successful interactions with Claude than later, less technical adopters. These early-adopting users may simultaneously be the most exposed to AI-driven disruption and most aided by AI in these initial, augmentative waves of adoption.”
High-tenure users also tend to use Claude “more collaboratively, for more work-related reasons, in more complex tasks … the most advanced users are more likely to iterate with Claude. It’s also consistent with learning-by-doing: the more time one spends using AI, the more effective one becomes at harnessing it.”
The implication here is that the less-fluent AI group is at a distinct disadvantage if a company is looking to trim its workforce. So, the pervasive fear that an AI model will take your job isn’t entirely accurate. It seems more likely that a co-worker with a greater facility in using AI will take over your job with the AI model’s help. Conduct yourself accordingly… and watch your back.
In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.
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Source: https://coingeek.com/as-crypto-firms-replace-staff-with-ai-how-can-you-keep-your-job/
