Original Author: Jialiu
"AI is the main reason for our layoffs." This is almost the primary explanation given by all companies for layoffs today.
In the first half of 2026, nearly 140,000 people were laid off in the US tech industry. Amazon cut 9% of its employees, and Meta cut 10%. Their reasons for the layoffs were almost identical: AI is changing everything, and the companies must streamline.
In fact, over 56% of layoff events in 2026 explicitly cited AI, automation, or machine learning as the cause. AI has been the top reason for layoffs in US companies for four consecutive months. Ironically, nearly 60% of companies admit that they package layoffs or hiring slowdowns as "AI-driven" when the real reason is financial pressure.
The AI shockwave is not confined to Silicon Valley; it is reshaping the employment structure of almost all industries. As an intersection of technology and finance, the Web3 industry has been particularly hard hit. The industry's large-scale layoffs have persisted for over half a year and have been exceptionally intense and rapid.
Starting this year, especially in recent months, news about staff cuts, team reorganizations, and personnel movements surrounding major trading platforms has densely appeared on X, Reddit, Xiaohongshu, Maimai, and in coffee chats among practitioners. Once-dominant BitMEX has almost faded from the mainstream view, and smaller platforms are exiting or scaling back business lines. With talent and attention now being drained by the AI industry, layoffs in the Web3 industry seem almost inevitable.
The Sword of Damocles Has Finally Fallen
Kevin received his termination notice just three days before 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 Web3 industry, jumping ship to join a leading trading platform. He later found out that his departure had been decided over a month earlier.
During that time, he hardly felt any signals of impending layoffs. All work proceeded normally, meetings went on as usual, messages were replied to. It wasn't until HR approached him that the reality hit—there was no reasonable justification, no claims of poor performance, but the sword of Damocles still fell on Kevin.
In hindsight, the only possible signal was that two out of their original ten-member team had left before him. At the time, the narrative was "not a good fit" or "found an easier job elsewhere." "Looking back now, that was probably when they started pushing them out," Kevin told Zhangsheng BeatZ.
The layoffs at Richard's smaller trading platform were even more extreme. After being a full-time dad for nine years, he returned to the workforce and found a job at a relatively small crypto trading platform. But he, along with many colleagues, was soon laid off.
According to him, one morning he turned on his computer as usual to start work, only to find his system access had been revoked. He initially thought it was a technical glitch until he opened the work group chat and saw about forty colleagues asking the same question: "Why can't I log in either?" No one knew what was happening. Panic spread through the chat like water. A few hours later, they received a cold termination notice in their personal emails, effective immediately.
What chilled Richard even more was another incident. Shortly before being laid off, his manager had hinted that a developer colleague under him "might need to be adjusted." Richard was trying to help this colleague stay, even rearranging work responsibilities to prove the person was indispensable. Before he could submit his plan, both of them ended up being laid off.
Another former employee at a crypto trading platform, Xiaoyu, described a similar layoff scene to Zhangsheng BeatZ. At her previous company, the first step of layoffs was mass deactivation of employees' Slack accounts and cutting off email access. "Whenever we saw someone suddenly disappear from Slack, we would immediately rush into private channels, scrambling to send our phone numbers and LinkedIn links," Xiaoyu said, "because we didn't know who would be next. We all wanted to stay connected while we still could."
"When the layoff finally hit me, my manager sent me a Slack message asking if I had time for a call," Xiaoyu said. "Before I could even reply, all my permissions were revoked."
Layoffs Strike Like a Tornado
Kevin revealed that in the months after he left, layoffs in his team continued, and now only two people remain. His former trading platform cut about 10% of its staff every quarter, accumulating to 40% over a year.
Coinbase announced global layoffs of about 700 people in May, officially labeling it an "AI-native reorganization," roughly a 14% cut. However, according to information obtained by Zhangsheng BeatZ from informed sources, the impact on Coinbase's India office far exceeded that number. A former employee claimed that about 90% of the India office staff left, affecting all business units, not just sales. Only a handful of engineers considered top-tier were invited to relocate to Canada to continue working.
Reportedly, the main reasons for the massive layoffs at the India office were high costs and the significant time difference with the US. Coinbase paid India's SDE2 (mid-level engineers) around 7.5 million rupees, equivalent to about 110,000 Canadian dollars, similar to the salary level of mid-level engineers in Canada. At most high-paying product companies, salaries for architects in India are even higher than their EU counterparts.
Many trading platforms have been exposed for abruptly closing employee system access on the same day after failed negotiations over severance packages with HR. And the recently shuttered platform BitMart saw entire departments cut starting in May.
Moreover, many platforms chose to conduct concentrated layoffs at specific times, not by coincidence. According to Zhangsheng BeatZ, the period around June 30th was a peak for industry layoffs. The reason is simple: new financial statements are due in July, and these numbers are shown to investors. Cutting a batch of people and reducing expenses immediately improves the profit and loss statement. For trading platform management, layoffs aren't just about cost reduction; they're a form of financial narrative management. In front of investors, a streamlined statement is more persuasive than any explanation.
It's not just Kevin and Richard's platforms; almost the entire Web3 industry is undergoing massive layoffs, with only a minority offering reasonable and satisfactory severance packages.
The interviewees mentioned earlier encountered similar situations: platforms cut off communication and access with incredible speed. "All contact information is on those systems. Without that access, we don't even have a channel to fight for our rights."
Zhangsheng BeatZ learned from informed sources that operations and product roles, working in offline or overseas offices, still received normal handover time and compensation during layoffs. "But many technical staff are remote, so they just fire them, quickly fire them. It doesn't really affect the company."
This is because many IT staff are located domestically, while the trading platforms are registered overseas. "You're not physically there, and the cost for an individual to pursue action is very high. It's just a bit of money, not enough to disrupt life, so most people don't want to or can't bother to fight it."
Even with a few days' buffer, employees faced difficult situations. When HR communicated the offboarding procedures to Kevin, they asked him to fill in the reason for leaving in the system and persuaded him not to choose "company termination."
"They would say if you choose company termination, the background check won't pass, they'll say bad things about you. So they pressure you to choose personal reasons for leaving." Choosing personal reasons means the company doesn't need to pay any additional compensation.
Kevin ultimately received no severance pay; the company only settled his salary and overtime up to his last working day. Reflecting later, Kevin realized there had been signals he hadn't interpreted correctly at the time. For instance, his work rapport with his direct manager started becoming strained; he could clearly feel the manager liked him less. But in an organization running at high speed every day, these subtle changes are easily overlooked until the final moment arrives.
During large-scale layoff periods, major trading platforms are trying every trick to make layoffs not look like layoffs.
For example, Zhangsheng BeatZ also learned from many interviewees that before employees join, leading trading platforms send out company-provided computers. These computers have strict monitoring systems installed internally, capable of tracking employee keyboard input frequency and mouse clicks, and this data is incorporated into performance evaluations.
Reportedly, an employee at one platform was fired the day after watching a drama on iQiyi for a while using the company-issued computer.
Another common tactic is setting nearly impossible KPIs for employees. After the evaluation period ends, employees are terminated citing "poor performance" or "not meeting company requirements." This way, layoffs are packaged as compliant performance-based elimination, and the company avoids paying extra compensation.
A former employee of a trading platform revealed on X that during one layoff period, the platform held regular "Web3 industry knowledge" tests, making them mandatory KPI assessments. Employees who failed the exam also faced the risk of immediate dismissal.
This massive wave of layoffs hit swiftly and violently like a tornado. But under the long-term pressure of intense surveillance, everyone tacitly agreed not to mention the elephant in the room.
Under the Storm's Gaze, A Chilling Silence Prevails
Compared to those cleanly laid off, the survivors aren't necessarily luckier.
Xiaoyu said after each round of layoffs, the survivors actually envy the colleagues who have already left because at least their fate is sealed. Those remaining live in constant fear every day, not knowing if they'll be next. Since the layoffs began, she could clearly feel work morale becoming extremely negative, permeated by an unspeakable sense of apathy and lack of motivation.
Richard also mentioned the subtle change in work atmosphere during the layoff period. Previously, the work rhythm was tight, intense, with rapid product iterations, but most of the time people were busy with real work—product updates and feature development. The current busyness is entirely different, more about satisfying management's fabricated requirements. The company intensified assessment mechanisms, requiring punctual check-ins, and meeting frequency became higher than before.
The trading platform's "stand-up meeting" culture was pushed to extremes during layoffs. The original intent of stand-ups is to have quick meetings; standing makes people uncomfortable, so they keep it brief. But according to Richard, at his platform, this efficiency tool turned into a drain: two stand-up meetings a day, yet no one knew which direction the product was actually heading.
The project manager changed three times in six months, and the product management team was eventually almost empty. Many had ongoing projects, but because key personnel were suddenly fired, sometimes just minutes before a meeting, work had to stop abruptly.
According to Richard, his platform even had outsourced teams, and the salaries of these outsourced personnel were significantly higher than those of regular employees. It wasn't until Richard later spoke face-to-face with two colleagues that he learned an executive had withheld salary increases for employees for two years.
Richard believes management doesn't care about cost control because their real concern isn't technology or product, but power and control.
Kevin's feelings echoed this. He increasingly felt his platform resembled a sluggish state-owned enterprise. Amid frequent security incidents across the crypto trading industry, the platform's tech team didn't gain more resources; instead, they became a state of nervous apprehension:不求有功，但求无过 (Not seeking merit, only seeking to avoid blame).
"No one dares to take risks anymore. Everyone just wants to avoid mistakes in their own work. The whole place feels like a state-owned enterprise," Kevin said.
Even before being laid off, John, who grew up abroad, had long lost patience with such a work environment.
From the moment he joined, he distinctly felt the company's "Chinese culture" was particularly strong. Chat records, JIRA, meeting minutes—almost everything was in Chinese. Foreign employees who weren't fluent in Chinese felt excluded. The work atmosphere was extremely strict, fast-paced, with quarterly performance reviews.
With everyone in different time zones, being online at irregular hours was commonplace. John mentioned his team's weekly stand-up was scheduled for Sunday night. "My weekend plans always ended early." His QA testing colleague was in a US time zone and often sent messages around 11 PM.
"We were always on call 24/7," John said, often seeing colleagues submit code at 2 AM on Saturdays. "There's simply no work-life balance here. The rhythm of life here is more like work, life, then more work."
Deep Palaces and Political Maneuvering, Inner Circle and Expendables
Richard joined the company at its peak and witnessed its entire decline. What struck him most was the "political maneuvering" among the platform's management, more naked and chaotic than typical office politics.
Partners at his company developed a severe trust crisis due to government investigations and potential lawsuits. One side's CTO/CFO felt deceived by another partner or didn't receive due support when facing government issues. Eventually, the partners split.
So, one side took the core team and a senior employee to form a "board," establishing a new company as the actual developer of the old product. Partners once called friends turned into client relationships within a month. By February, the new company was pushing business at a pace of two new products per week. All this happened around the time Richard resigned.
Grassroots employees in this high-level power struggle had neither the right to know nor a choice. They were casualties of internal conflict and turmoil.
In the Web3 industry, many project founders, even trading platform CEOs, are merely frontmen. This is an open secret within the industry, tacitly understood by almost all practitioners. The real decision-makers often hide behind the scenes, and the primary quality needed by those in front isn't innovation or technology, but loyalty.
"Toxic culture is transmitted top-down. People who survive in this system are mostly like that. If you can climb up, you'll inevitably be shaped into this by the environment. If you're not like that, you won't get promoted," Kevin analyzed. "Those promoted are almost always the type skilled in political maneuvering, adept at upward management, and aggressive towards subordinates."
Those deemed not part of the inner circle are systematically removed by higher-ups using various methods. First, they're excluded from meetings, key decisions bypass them. Then they're transferred to peripheral roles, away from core business. Next, they no longer need to submit weekly reports, and new tasks aren't assigned. By the time replacements are already arranged, they finally realize they've been sidelined.
"So the entire system is very toxic," Kevin said. "You can check Glassdoor; people generally think colleagues are great, willing to support each other, good personalities. But the system itself is like a deep palace. You can't say the wrong thing in front of superiors, and you have to watch your wording."
When the Nest Overturns, No Egg Remains Intact
"I think the entire Crypto business model has already collapsed," Kevin said.
A trading platform's past core revenue relied on two things: trading fees and token listing revenue. When the market was hot, new projects flooded in, retail traders swarmed, fees and listing charges soared, and teams expanded. "But now all projects seeking listings have been proven; they're all here to make money and then leave."
The issue of listing fees is equally severe. According to Kevin, platforms charge projects extremely high fees. A small project might have to pay hundreds of thousands of dollars just for listing, while its market cap post-listing might only be tens of millions. "Trading platforms are eating the entire ecosystem to extinction. On one hand, the cost of starting a project in crypto is too high; on the other hand, retail investors aren't buying anymore." In his view, it's a downward spiral: project quality declines, more projects crash on listing, retail exits, trading volume shrinks, fee revenue decreases, and listing fees are forced higher.
The rise of on-chain derivatives platforms like Hyperliquid puts centralized exchanges in an even more passive position. The most profitable derivative trading segment for centralized exchanges no longer has to happen solely within their own systems.
Market-level shocks are also accelerating this spiral decline.
Several interviewees independently mentioned the negative, far-reaching impact on industry confidence from the massive, industry-wide liquidation event on October 10th last year. All leveraged positions with multiples over 2x were force-liquidated that day, retail investors were wiped out, and confidence has yet to recover.
When the nest overturns, no egg remains intact; no one escapes unscathed. The trading platforms'困境 (predicament) ripples outward across the entire industry.
John told Zhangsheng BeatZ that many mid-sized Web3 institutions with assets under management between $100 million and $500 million are shutting down, as old fundraising and DeFi yield strategies become increasingly difficult to sustain. Since last summer, cryptocurrency liquidity has dried up "very severely." Essentially, all altcoins launched in early 2025 are trending toward zero, with extremely low book values. Over-the-counter trading volume is dismal. Apart from RWA-related business, there's almost nothing worth doing in market making. A friend of John's working on crypto-neutral strategies at a market maker told him that even after improving strategies to increase market share and profit per trade, the company's overall profit still dropped significantly, generally shrinking to about 30% of the original. John's friend was eventually laid off due to company cost-cutting.
It's not just market makers and quant firms. Kevin mentioned in the interview that currently, Web3 VCs are very cautious in investment amounts and number of deals, basically in a state of not investing. Even when they do, amounts are significantly lower than before. "VC investment this cycle has shrunk by 80%. Almost no one is investing in crypto anymore. So when the next bull market comes, there won't be many good projects to offer retail investors through listings."
Project teams are in equally tough situations. Kevin's assessment is: "Except for some projects with Web2 revenue on the B2B side, the vast majority of projects have no B2B revenue and no consumer revenue."
Crypto is Like a Roach Motel
A wise bird chooses its tree to roost in, but for those laid off from crypto trading platforms, the problem isn't about choosing a tree, but whether there are any trees left to choose.
After leaving the trading platform, Kevin went to an AI-related startup. He's not alone. According to Zhangsheng BeatZ, the vast majority of practitioners leaving the Web3 industry have flocked to the AI industry. This isn't hard to understand: AI is the hottest sector currently, with active funding, abundant positions, and crypto and AI share many commonalities in channels and attributes, both emphasizing growth, user acquisition, and global operations. Many skills are directly transferable.
Richard's disappointment with the Web3 industry is more profound. In his view, the platform he worked for was filled from top to bottom with incompetent people, from partner infighting to grassroots employee slacking. "Even today, people in the crypto circle are still a bunch of self-righteous, arrogant individuals." He later also shifted to the AI industry, completely leaving the crypto world.
In contrast, few can transition into traditional industries. A small portion of technically solid trading system and risk control talent entered traditional market makers and quant firms. Some operations, BD, and compliance personnel took advantage of active Hong Kong and US stock markets to move into the traditional brokerage system, but these are minorities. The outcome for most laid-off from trading platforms is flowing to the next tier of smaller platforms.
Because traditional industries' discrimination against the Web3 industry is deeper than many imagine.
Zhangsheng BeatZ learned from traditional finance HR departments that during recruitment, when they see candidates still employed at Web3 companies on their resumes, they are directly screened out. In the stereotype of many traditional finance practitioners, the crypto industry is like a giant "roach motel," implying regulatory gray areas, speculative culture, and unverifiable performance. People from here carry inherent sin in their eyes.
Even within the AI industry, similar prejudices exist. Some serious AI companies focused on large models and infrastructure also hold reservations about candidates with Web3 backgrounds. In their view, Web3 "growth" is more built on speculation and narrative than real technical barriers. An operations person from a trading platform and an operations person from ByteDance have vastly different perceived value in the eyes of an AI company's HR.
This might be the most profound cost borne by Web3 practitioners who have experienced layoffs.
This Winter is Colder Than Before
Every industry has cycles. But this winter for the Web3 industry might be different from the past.
Compared to before, the competitive landscape in the cryptocurrency field has completely changed. Prediction markets like Polymarket and Kalshi, retail brokerage trading—all are competing for the same pool of retail investors' money. US retail investor funds are flowing into AI stocks and prediction markets, not back into crypto.
Some practitioners even believe the current situation is worse than the 2022 crypto winter. At least in 2022, retail was still present. Now, the October 10th massive liquidation washed away the last leveraged retail traders.
Judging whether an industry is young or old isn't just about its revenue, but what it fights for.
Even in this "shrinking volume" market, the mutual struggle and dirty tricks among trading platforms haven't stopped. According to Zhangsheng BeatZ's sources, some platforms' HR departments even list "poaching talent from competitors with high salaries" as a KPI metric, hiring them for a few months before firing them under various pretexts. This disrupts competitors' team rhythm and acquires intelligence and client resources, treating the poached individuals as disposable tools.
This reminds the author of the food delivery wars in the internet industry a few years ago, where the smartest people spent hundreds of billions in profits on mutual attrition. In two quarters, China's internet giants—Alibaba, Meituan, JD.com—burned over 220 billion RMB (about $31 billion USD) on food delivery subsidies, close to the total global corporate spending on generative AI for an entire year.
Today's crypto trading platforms are replaying the same script. The entire industry pie is shrinking, retail is leaving, trading volume is萎缩 (dwindling), yet platforms are still poaching, publicly bickering, and engaging in attrition battles over the existing share.
In the past, we often attributed trading platform layoffs to Web3's cyclical nature and the AI industry's impact. As mentioned at the article's beginning, over half of 2026's tech layoffs cited AI as the reason, but nearly 60% of companies admit the real cause is actually financial pressure.
The Web3 industry is no exception.
Charging projects hundreds of thousands in listing fees; listing a large number of low-quality tokens, causing retail to lose repeatedly in crashes; eroding employee trust and creativity with opaque performance reviews and surveillance systems; during a downturn, not thinking about new business models but instead spending resources poaching from competitors.
If today's Web3 winter isn't the fate of cycles, then whose fault is the decline of the Web3 industry?
This article thanks Kevin, Richard, Xiaoyu, John, and other interviewees for sharing the real experiences of trading platform practitioners. For anonymity, their real names, platforms, specific positions, and tenure have been withheld.
