The once-booming Web3 sector now enters a wave of layoffs

Original Author: Jia Liu

"AI is our main reason for layoffs." This is almost the primary explanation given by every company conducting layoffs today.

In the first half of 2026, nearly 140,000 people were laid off in the U.S. tech industry. Amazon cut 9% of its workforce, and Meta cut 10%. Their stated reasons for the layoffs were almost identical: AI is changing everything, and the company must streamline.

In fact, in 2026, over 56% of layoff events explicitly cited AI, automation, or machine learning as a reason. AI has been the number one reason for corporate layoffs in the U.S. for four consecutive months. But ironically, nearly 60% of companies admit that they have packaged layoffs or hiring slowdowns as "AI-driven," when the real reason is financial pressure.

The shockwave from AI isn't confined to Silicon Valley; it's reshaping the employment structure of almost every industry. And the Web 3.0 industry, as a crossroads of tech and finance, is feeling the impact particularly acutely. Large-scale layoffs in the Web 3.0 industry have persisted for over half a year, and they've been exceptionally brutal and swift.

Starting this year, and especially in recent months, news about layoffs, team restructuring, and personnel changes at leading trading platforms has been dense across X, Reddit, Xiaohongshu, Maimai, and industry coffee chats. The once-dominant BitMEX has largely faded from the mainstream view, and smaller platforms are exiting or shrinking their business lines. With talent and attention being drained by the AI industry, layoffs in the Web 3.0 sector seem like an inevitable choice.

The Sword of Damocles Finally Falls

When Kevin received his termination notice, there were only three days left until his last day.

Kevin had worked at a major internet company for several years before being attracted by the high salaries and narrative of the Web 3.0 industry, jumping ship to a leading trading platform. He later learned that his departure had actually been decided over a month prior.

During that time, he felt almost no signals pointing towards layoffs. All work was proceeding normally; meetings were held, messages were answered. It wasn't until HR approached him—with no reasonable justification, no mention of poor performance—that the Sword of Damocles finally fell on Kevin.

Looking back, the only possible signal was that two people from his original ten-person team had already left before him. At the time, the official line was that they "weren't a good fit" or had "gone to find easier jobs." "Looking back now, maybe that was when they were already pushing them out," Kevin told BeatZ.

The layoff method at Richard's smaller trading platform was even more extreme. After being a stay-at-home dad for nine years, he returned to the workforce, landing a job at a relatively small crypto trading platform. But he, along with many colleagues, was quickly laid off.

According to his account, one morning he opened his computer as usual to start work, only to find his system permissions had been revoked. He initially thought it was a technical glitch, until he opened the work group chat and found around forty colleagues asking the same question: "Why can't I log in either?" No one knew what was happening. Everyone looked at each other in confusion, panic spreading through the chat like water. A few hours later, they received a cold layoff notice in their personal emails, effective immediately.

What chilled Richard even more was something else. Shortly before being laid off, his manager hinted that one of the developers under him "might need to be let go." Richard was still trying to find a way to fight for this colleague, even restructuring work assignments to prove the person was irreplaceable. But before he could even submit his proposal, both of them were laid off.

Xiaoyu, another former employee of a crypto trading platform, described a similar layoff scenario to BeatZ. At her previous company, the first step of layoffs was to mass-deactivate employees' Slack accounts and cut off email access. "Whenever we saw someone suddenly disappear from Slack, we'd rush into private chat channels and frantically send our phone numbers and LinkedIn links," Xiaoyu said, "because we didn't know who would be next, and everyone wanted to stay in touch while they still could."

"When the layoff finally came for me, my manager messaged me on Slack asking if I had a moment for a call," Xiaoyu said. "Before I could even reply, all my permissions were revoked."

Layoffs Hit Like a Tornado

Kevin revealed that in the months following his departure, the team continued to downsize, leaving only two people now. His trading platform laid off roughly 10% of its staff every quarter, totaling about 40% over the year.

Coinbase announced global layoffs of approximately 700 people in May, framing it as an "AI-native restructuring," about 14% of its workforce. However, according to BeatZ's sources, the impact on Coinbase's India office was far greater than that number suggests. A former employee said about 90% of the staff at the India office left, affecting all business departments, not just sales. Only a select few considered top-tier engineers were invited to relocate to Canada to continue working.

It's said that the main reasons for the massive layoffs in the India office were high costs and the significant time zone difference with the U.S. Coinbase pays its SDE2 (mid-level engineers) in India around 7.5 million rupees, roughly 110,000 Canadian dollars, comparable to local mid-level engineer salaries in Canada. In most high-paying product companies, Indian architects even earn more than their EU counterparts.

Numerous trading platforms have reportedly had cases where employees failed to reach a severance agreement with HR, only to be told that day was their last working day and have their system access shut off. And at recently-shuttered platform BitMart, entire departments have been eliminated since May.

Furthermore, many trading platforms choosing to conduct layoffs at specific times is no coincidence. According to BeatZ, around June 30th is a peak period for industry layoffs. The reason is simple: new financial reports are due in July, and these numbers are meant for investors. Lay off a batch of people, cut some expenses, and the income statement immediately looks better. For trading platform management, layoffs aren't just about reducing costs; they're a form of financial narrative management. In front of investors, a streamlined report is more convincing than any explanation.

It's not just Kevin's and Richard's platforms; almost the entire Web 3.0 industry is undergoing massive layoffs, and only a few severance packages are reasonable and satisfactory.

The interviewees mentioned earlier all encountered similar situations. Trading platforms cut off contact and access rights extremely quickly during layoffs: "All our contact information was on those systems. Without access, we didn't even have a channel to fight for our rights."

BeatZ learned from informed sources that operations and product roles, working in physical or overseas offices, still receive proper handover time and compensation during layoffs. "But many tech roles are remote, so they'll just fire you directly, and quickly. It doesn't really affect them."

This is because many IT staff are based in China, while the trading platforms are registered overseas. "You're not physically there, so the personal cost of pursuing legal action is high. It's just a bit of money that won't affect your life, so most people don't want to—and can't—argue about it."

Even with a few days of buffer, employees face a difficult situation. When HR communicated the exit procedures, they asked Kevin to fill in the reason for leaving in the system, urging him not to select "terminated by company."

"They'd say, if you choose 'terminated by company,' your background check won't pass; they'll speak badly of you. So they pressure you into choosing 'resigned voluntarily.'" By choosing voluntary resignation, the company doesn't have to pay any extra compensation.

Kevin ultimately didn't receive any severance; the company just settled his salary and overtime pay up to his last working day. Reflecting on it later, Kevin admitted that there were signals in the period leading up to his layoff that he failed to read. For instance, friction with his direct manager increased, and he could clearly sense the manager's waning approval. But in an organization operating at high speed every day, these subtle shifts are easily overlooked—until the other shoe drops.

During mass layoff periods, trading platforms are finding creative ways to make layoffs not look like layoffs.

For example, BeatZ also learned from many interviewees that before employees start, leading trading platforms send out company-issued computers. These computers come with sophisticated monitoring systems installed that can track keyboard input frequency and mouse click behavior, with this data incorporated into performance reviews.

It's said there was an employee at a trading platform who got fired the next day after watching a show on iQiyi for a while on their company computer.

Another common tactic is setting nearly impossible KPIs for employees, then firing them after the review period citing "poor performance" or "failure to meet company requirements." Through this method, layoffs are packaged as compliant performance-based elimination, allowing the company to avoid paying additional compensation.

A former trading platform employee revealed on X that during one layoff period, the platform conducted regular "Web 3.0 industry knowledge" tests, mandatorily incorporating them into KPI assessments. Employees who failed the exam faced the risk of immediate dismissal.

This massive wave of layoffs has swept through like a tornado—swift and violent—but because of the long-standing high-pressure surveillance environment, everyone tacitly agrees not to talk about the elephant in the room.

Silence Reigns Amidst the Storm

Compared to those cleanly laid off, the survivors aren't necessarily luckier.

Xiaoyu says that after each round of layoffs, the survivors actually envy their departed colleagues, because at least their shoes have dropped. Those who remain live each day like startled birds, never knowing if they're next. Since the layoffs began, she's noticed a palpable shift towards extreme negativity in the work atmosphere—a pervasive, unspoken gloom that makes it hard to muster enthusiasm for anything.

Richard also mentions a subtle change in the work environment during layoffs. Previously, the work pace was intense, demanding, and product iteration was rapid, but most of the time people were busy with real work—product updates and feature iterations. The current busyness is completely different; it's more about fulfilling management's fabricated initiatives. The company has intensified assessment mechanisms, requires clocking in at specific times, and meetings have become more frequent than ever.

The "stand-up meeting" culture at trading platforms has been pushed to the extreme during layoff periods. The original purpose of stand-ups was to have quick meetings—standing is uncomfortable, so people get to the point. But according to Richard, at his platform, this tool meant for efficiency has become a drain: two stand-ups a day, yet even then, no one knows where the product is heading.

Three project managers rotated in six months, and the product management team was eventually nearly empty. Many people had projects in progress, but because key figures were suddenly fired within a day—sometimes just minutes before a meeting—the work had to come to an abrupt halt.

Richard also described how his platform even had outsourced teams, and these outsourced workers were actually paid significantly more than some full-time employees. It wasn't until Richard later talked face-to-face with two colleagues that he learned it was because senior management had withheld employees' salary increases for two years.

Richard believes management doesn't care about runaway costs, because what they truly care about isn't technology or product, but power and control.

Kevin's experience echoes this sentiment. He increasingly feels like his trading platform resembles a sluggish state-owned enterprise. Amidst the backdrop of frequent security incidents across the entire crypto trading platform industry, the technical team hasn't received more resources; instead, they've become skittish: "Don't seek merit, just avoid mistakes."

"No one dares to take risks anymore; everyone just wants their own work to be error-free. The whole place feels like a state-owned enterprise," Kevin said.

John, who grew up abroad, had already run out of patience with this kind of work environment before he was laid off.

From the moment he joined, he could clearly feel the company's heavily "Chinese-style culture." Chat logs, JIRA tickets, meeting minutes—almost everything was in Chinese. Foreign employees with poor Chinese skills felt excluded. The work atmosphere was extremely demanding and fast-paced, with a performance review every quarter.

With team members spread across different time zones, being online at odd hours was commonplace. John mentioned that his team's weekly stand-up was scheduled for Sunday evenings. "My weekend plans always ended early." His QA colleague, based in the U.S. time zone, would frequently send messages at 11 PM.

"We always had to be on call 24/7," John said, often seeing colleagues submit code at 2 AM on Saturdays. "There's no work-life balance here. The rhythm of life here is more like work, life, then work again."

Palace Intrigues and Power Plays, Favorites and Pawns

Richard joined during the company's heyday and witnessed its entire rise and fall. What saddened him most was the "power struggle" among the trading platform's management—more naked and chaotic than typical office politics.

A severe crisis of trust developed between the company's partners due to government investigations and potential litigation. One side (the CTO/CFO faction) felt deceived by the other partner, or felt they hadn't received adequate support when facing government issues. Eventually, the partners went their separate ways and announced a split.

One side formed a "board of directors" with core team members and a senior employee, establishing a new company that became the actual developer of the old product. Those who were once called friends became client relationships within just a month. By February, the new company was already pushing forward at a pace of two new products per week. All of this happened right around the time Richard resigned.

Lower-level employees caught in this high-level power struggle had neither the right to know nor the right to choose. They were mere casualties of internal strife and turmoil.

In the Web 3.0 industry, many project founders, and even trading platform CEOs, are often just figureheads. This is an open secret within the industry, tacitly understood by almost everyone. The real decision-makers often stay behind the scenes, and the primary quality required of the front-person isn't innovation or technical skill, but loyalty.

"Toxic culture is transmitted top-down. The people who survive in this system are those kinds of roles. If you can move up, you'll inevitably be alienated by this environment into that mold. If you're not that kind of person, you won't get promoted," Kevin analyzed. "Those who get promoted are almost always the ones skilled in scheming, adept at managing upwards, and tough on subordinates."

Those considered "not part of the inner circle" are systematically pushed out by management using various methods. First, they're excluded from meetings; key decisions are made over their heads. Then they're transferred to marginalized positions, far from core business. Next, weekly reports are no longer required, and no new tasks are assigned. By the time their replacements are already in place, they finally realize they've been completely sidelined.

"So the whole system is very toxic," Kevin said. "You can look at Glassdoor; people generally think colleagues are nice and supportive, with good personalities. But the whole system is like a deep palace. You can't say the wrong thing in front of your superiors, and you have to watch your wording."

When the Nest Overturns, No Egg Remains Intact

"I think the entire Crypto business model has collapsed," Kevin stated.

Trading platforms historically relied on two core revenue streams: trading fees and listing fees. When the market was hot, new projects flooded in, retail traders traded frenetically, fees rose accordingly, and teams expanded. "But now, all the projects getting listed have proven they're just here to make money and leave."

The listing fee problem is equally severe. According to Kevin, trading platforms charge projects exorbitant fees. A small project might pay several hundred thousand dollars just for a listing fee, only to have a market cap of maybe a few tens of millions of dollars after launch. "Trading platforms have bled the entire ecosystem dry. On one hand, the cost of starting a business in crypto is too high; on the other hand, retail investors are no longer buying in." In his view, this is a downward spiral: declining project quality, more tokens breaking below issue price, retail exiting, shrinking trading volume, reduced fees, and consequently, even higher forced listing fees.

The rise of on-chain derivatives platforms like Hyperliquid has put centralized exchanges in an even more passive position. The derivatives trading segment, the most profitable area for CEXs, no longer has to happen solely within their own systems.

Market-level shocks are also accelerating this downward spiral.

Several interviewees independently mentioned the massive industry-wide liquidation event on October 10th of last year, which had a profound negative impact on the industry and deeply dented the confidence of all practitioners. All open positions with leverage exceeding 2x were force-liquidated that day, wiping out retail investors who haven't recovered since.

When the nest overturns, no egg remains intact; no one can stay immune. The plight of trading platforms is sending ripples across the entire industry.

John told BeatZ that many mid-sized Web 3.0 funds managing between $100 million and $500 million are shutting down, as old fundraising strategies and DeFi yield strategies become increasingly unsustainable. And since last summer, liquidity in crypto has dried up "very severely." Essentially, almost all altcoins launched in early 2025 are trending towards zero, with extremely low book values. OTC trading volumes are dismal, and in market making, aside from RWA-related business, there's hardly anything worth doing. John mentioned a friend working on crypto-neutral strategies at a market maker who told him that despite improving strategy to