India-based digital currency exchange Coinswitch has announced that it will cut its workforce by 8% as it explores various options to continue operations.
Recent headcount reductions affected Staff on the customer support team are due to overlapping support roles, the exchange said. A total of 44 people were adversely affected by the layoffs, with Coinswitch claiming the employees left voluntarily after discussions with management.
“We continually evaluate our business to remain competitive, prioritizing innovation, value and serving our customers,” a CoinSwitch spokesperson said. “To that end, we have appropriately sized our customer support team to match the current volume of customer inquiries for our platform.”
As the broader digital currency market faces a prolonged bear market crisis, Coinswitch faces its fair share of challenges. The exchange’s trading volume took a heavy hit of more than 70% and the number of active users on the platform fell.
Coinswitch has also tackled India’s stringent 30% tax requirements and an additional 1% withholding tax deduction (TDS).
The exchange said the number of customer inquiries has dropped significantly since the beginning of the year. The company said it considered several options before deciding to part ways with its employees, including first absorbing customer support staff into other roles at the exchange.
Affected employees will be paid four months of severance pay, and the exchange said it would “welcome the reinstatement of affected employees” should trading volumes rise again.
Despite the company’s claims that only support employees were affected by the layoffs, insiders familiar with the matter claim the layoffs spanned multiple teams. Affected employees allege that the company did not give them proper notice of their dismissal, even though they paid them severance pay.
“Access was suddenly revoked without prior notice,” said one affected individual, who requested anonymity. “Several positions were impacted, including team leaders, agents, support staff, senior managers and quality analysts.”
Aiming for business diversification
CoinSwitch has revealed plans to diversify its business by developing new services other than digital currency. CEO Ashish Singhal said the company is currently negotiating with regulators ahead of the release of seven mainstream financial products in the fourth quarter of 2023.
The company aims to launch equities, bonds, exchange-traded funds (ETFs), time deposits and mutual funds for its users.
CoinSwitch wasn’t the only Indian exchange negatively affected by unfavorable macroeconomic conditions, CoinDCX saw a 12% reduction in staff headcount. CoinDCX said in a statement that it is doing so to survive despite declining trading volumes and reserves. It will look to headcount reductions and automation to “increase efficiency and productivity.”
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