Dev platform Stack Overflow axes 28% of staff as AI competition grows

October 17, 2023 Coin Telegraph

The technology Q&A forum has seen declines in web traffic since the launch of ChatGPT in 2022.

Developer and programmer platform Stack Overflow is cutting the company’s headcount by approximately 28% amid a rise in the popularity of artificial intelligence (AI) chatbots.

On Oct. 16, Stack Overflow CEO, Prashanth Chandrasekar, made the announcement citing the challenges of macroeconomic pressures impacting the entire tech industry.

The firm is on a “path to profitability” and “continued product innovation,” said Chandrasekar who added, “This year we took many steps to spend less.”

Stack Overflow is a 15-year-old tech-focused question-and-answer forum for millions of developers, coders, and enthusiasts. It doubled its headcount in 2022 to 540, according to reports, so this week’s layoffs account for around 150 employees.

In August, Stack Overflow noted that its web traffic has seen a small decline compared to 2022, falling by an average of 5%.

"Conversely, in April of this year, we saw an above-average traffic decrease (~14%), which we can likely attribute to developers trying GPT-4 after it was released in March," it added.

The firm also said it expected generative AI to cause "some rises and falls in traditional traffic and engagement over the coming months."

Meanwhile, technology outlets such as Ars Technica have attributed the rise of AI chatbots to declines in the traffic and usage of traditional social knowledge-sharing platforms such as forums.

“Chatbots can offer more specific help than a 5-year-old forum post ever could,” it stated on October 17. ChatGPT and the like can also correct code, provide optimization suggestions, and explain what each line of code is doing.

New York University Leonard N. Stern School of Business Professor Panos Ipeirotis also made a similar suggestion in an X post on Oct. 17.

*Screenshot from X post by professor Panos Ipeirotis on Oct. 17. Source: X/@ipeirotis*

However, Stack Overflow is working on its own answer to OpenAI’s ChatGPT in the form of “Overflow AI,” announced in July.

The goal is to introduce new features to leverage Stack Overflow's community knowledge to power AI that provides developers with personalized, trustworthy solutions. Chandrasekar concuded.

“As we refine our focus, priorities, and strategy it's to better meet the demands of our users, customers, and partners as part of this commitment to product innovation and the continued momentum of OverflowAI.”

Cointelegraph contacted Stack Overflow for comment but was referred back to the Oct. 16 announcement.

In related news, the Coinhouse crypto exchange has also axed 15% of its workforce according to reports.

The 2015-founded French exchange has laid off 10 of its 70 employees citing “reduced enthusiasm for Web3 and a fragile global economic environment.”

Earlier this month French hardware wallet provider announced a 12% staff reduction.

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Chainalysis axes another 15% of staff citing difficult market conditions

October 3, 2023 Coin Telegraph

chainalysis

The Chainalysis workforce will be reduced by around 150 as the bear market bites deeper.

Blockchain analytics firm Chainalysis has reduced its headcount by another 15% this week, citing the need to reduce expenses due to continued bear market blues.

On Oct. 3, Chainalysis confirmed to Cointelegraph that it had made the difficult decision to part ways with 15% of its employees, amounting to approximately 135 staff.

"While Chainalysis continues to be well positioned for long-term success as a consistently top-performing software company, we are very focused on growing efficiently and, due to market conditions, believe it necessary to reduce our expenses at this time,” said Chainalysis Vice President of Communications, Madeleine Kennedy.

We remain committed to our mission to build trust in blockchains among government agencies, financial institutions, and cryptocurrency businesses,” she added.

A spokesperson for Chainalysis confirmed the firm had around 900 employees before the most recent cuts.

It’s the second round of cuts for the company this year, as the ongoing crypto bear market has reduced the demand for commercial products. In February, Chainalysis cut around 40-50 jobs as part of a reorganization in light of worsening market conditions.

Digital asset market capitalization has fallen by 64% from its peak level almost two years ago. This year, markets have remained mostly flat with volatility, liquidity, and trading volumes dwindling. Moreover, Bitcoin has failed to break resistance above $30,000 several times and has remained range-bound for the past six months.

A Forbes report citing an email from CEO Michael Gronager to staff suggests the cuts will come mainly from marketing and business development teams focused on the private sector.

The Chainalysis spokesperson has confirmed the information in the report as accurate.

Very few leading crypto and blockchain companies have escaped from having to axe staff this year.

In September, Binance.US let a third of its staff go as regulatory pressure intensified. Last month also saw venture-backed blockchain firm R3 axe a fifth of its workforce.

Magazine: Blockchain detectives: Mt. Gox collapse saw birth of Chainalysis

Disney Reportedly Axing Metaverse Division Amidst Company Restructuring

April 1, 2023 Bitcoin.com

Crypto bank Anchorage Digital cuts 20% of staff citing regulatory uncertainty

March 15, 2023 Coin Telegraph

Anchorage Digital

It's unclear whether Anchorage Digital’s layoffs relate to the current turmoil in the U.S. banking sector.

Crypto bank Anchorage Digital announced it would be letting go of 75 employees, representing approximately 20% of its workforce, citing regulatory uncertainty in the United States as a factor in its decision.

In a March 14 statement labeled the layoffs as “a strategic realignment to better focus our resources,” and pointed to “broad macroeconomic challenges, and crypto market volatility” as other factors contributing to its shift in strategy.

It said the market conditions had boosted demand for its product and client assets under custody "are at an all-time high," but added:

"These same macroeconomic, market, and regulatory dynamics are creating headwinds for our business and the crypto industry.”

Anchorage — which became the first U.S.-based crypto firm to be granted a national trust bank charter from the Office of the Comptroller of the Currency in January 2021 — expressed continued confidence in the digital asset landscape and its ability to build “regulated solutions for digital asset holders.”

The layoffs come at a time when the banking system in the U.S. is in a state of disarray after three regional banks went under in just one week.

Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank have all gone under since March 8, prompting the Federal Deposit Insurance Corporation (FDIC) to take the extraordinary step of guaranteeing all customer deposits in excess of the standard $250,000 it normally guarantees for SVB and Signature.

@federalreserve @USTreasury @FDICgov issue statement on actions to protect the U.S. economy by strengthening public confidence in our banking system, ensuring depositors' savings remain safe: https://t.co/YISeTdFPrO
— Federal Reserve (@federalreserve) March 12, 2023

It’s unclear if the recent developments regarding SVB, Signature, and Silvergate contributed to Anchorage’s decision to cut staff.

Anchorage did not immediately respond to Cointelegraph’s request for comment.

Layoffs within the crypto industry have considerably slowed since the beginning of the year after the nearly 3,000 positions cut by crypto firms such as crypto exchanges Coinbase and crypto.com in January were followed by a more muted 570 layoffs for February.

Blockchain.com Shutters Asset Management Subsidiary Amid Crypto Winter and Industry Turmoil

March 11, 2023 Bitcoin.com

Binance ‘not planning any layoffs,’ 500 roles to be filled in H1

March 3, 2023 Coin Telegraph

BTC

A Binance spokesperson told Cointelegraph that they hired 600 people since January and have no imminent plans for layoffs.

Cryptocurrency exchange Binance is “not planning any layoffs” and is instead trying to fill another 500 roles by the end of June, according to a Binance spokesperson.

The comments came despite a huge spike in crypto layoffs in January — the majority of which were from crypto exchanges. In a statement, the Binance representative said:

“As of today, we are actively hiring for more than 500 roles with the goal of filling them by the end of H1 [...] We are not planning any layoffs.”

The spokesperson was responding to a request for clarification from Cointelegraph on March 1 regarding a tip it had received of possible redundancies at the crypto exchange. The latest comments appear to completely refute this speculation.

At the time of writing, Binance had 463 listings on its job openings page, with roles in business development, communications, customer support and engineering, to name a few.

*Some of the business development job openings at Binance. Source:* *Binance*

In January, Binance CEO Changpeng Zhao said that the firm was planning for a hiring spree in 2023, increasing its headcount by 15% to 30%, according to a Jan. 11 report from CNBC.

The spokesperson said that the company has hired more than 600 people since the start of 2023.

According to CoinGecko, 84.8% of the crypto layoffs in January were due to crypto exchanges reducing headcount, including Coinbase, Huobi, Blockchain.com, Crypto.com and Luno.

Coinbase announced it would be reducing its headcount by around 950 on Jan. 10, while Crypto.com announced on Jan. 13 that it would be reducing its workforce by around 500.

Binance has been regarded by some, such as Arcane, as one of the “winners” of 2022, with the fall of crypto exchange FTX and the implementation of zero-fee Bitcoin (BTC) trading leading to it capturing an overwhelming portion of the market.

On the other side of the coin, the exchange has also seen intense scrutiny. Most recently, this has revolved around the alleged shuffling of $1.8 billion in funds which some have compared to the actions of bankrupt crypto exchange FTX.

Binance used $1.8 billion in customer funds for its own purposes, similar to what FTX did

Here we go again
— Genevieve Roch-Decter, CFA (@GRDecter) February 28, 2023

Binance CEO Changpeng Zhao took to Twitter to respond to the allegations, labeling it “FUD” and suggesting it was standard practice for an exchange.

This year has had a tough start for those working in the crypto industry, with at least 14 firms and nearly 3,000 jobs being lost in January before a milder 570 layoffs in February.

But the tide could be turning, with the crypto market cap increasing by over 34% so far in 2023, according to CoinMarketCap, and other firms, such as USDC issuer Circle, also planning to go on a hiring spree.

Crypto layoffs decelerate, with layoffs falling to 570 in February

March 1, 2023 Coin Telegraph

Coin Telegraph

The number is a stark contrast to over 2,900 employees from the crypto industry let go in January.

Crypto industry layoffs appear to have slowed down significantly over the past month with an estimated 570 crypto employees dismissed in February, down from an estimated 2,850 in January.

Cointelegraph compiled the figures based on publicly reported layoffs and found job cuts were spread across at least 12 companies over the 28-day period, but noticeably lacked the triple-digit crypto exchange layoffs compiled in January, such as those from Coinbase, Crypto.com and Huobi.

Instead, staff cuts came in the double-digits for the most part — impacting blockchain analytics firms, blockchain and software development firms, and digital asset platforms among others.

The most recent layoffs came from crypto analytics firms Elliptic and Messari, which cut 10% and 15% of staff, respectively.

Messari founder, Ryan Selkis, tweeted on Feb. 23 that the staff cuts were due to “market headwinds” and a restructuring of their internal teams. It is estimated to have impacted around 27 employees.

1/ Yesterday we made the difficult decision to restructure several of Messari’s internal teams, leading to a 15% staff reduction.

We're grateful for the contributions of the teammates we have parted ways with, and will provide resources and connections to help them transition.
— Ryan Selkis (@twobitidiot) February 23, 2023

Meanwhile, an Elliptic spokesperson told DLNews on Feb. 24 that the decision to lay off 20 employees was a move to tamp down operating expenses.

It follows news from earlier in the month, when Chainalysis, another blockchain analytics company, revealed it had laid off 44 of its 900 employees, representing 4.8% of its workforce “primarily in sales.”

Neil Dundon, an Australia-based crypto recruiter told Cointelegraph “the spike in layoffs is a macro event not just in Web3 but tech in general fueled by fears of an extended recession.”

*Tech layoffs between January 2022 to February 2023. Source: Layoffs.fyi*

Data from layoff tracker Layoffs.fyi revealed there was a total of 24,572 employees laid off across 129 tech companies in February, down from 84,414 across 268 tech companies in January.

“Web3 is always going to be hit to a harder degree at least until Bitcoin decouples from the stock market. There may also be some fears of tougher regulations in web3 adding to the spike. But as always crypto is resilient.”

On the higher end of layoffs in the month, nonfungible token (NFT) company Dapper Labs and Ethereum-scaling platform Polygon Labs both dismissed around 20% of staff as a result of internal restructuring.

A big part of this strategy includes unifying all of our teams under Polygon Labs to drive more growth.

As part of this consolidation process, we’ve made the difficult decision to reduce our team by 20% impacting multiple teams and about 100 positions.
— Sandeep | Polygon Top 3 by impact (@sandeepnailwal) February 21, 2023

In a Feb. 21 Twitter post, Polygon co-founder Sandeep Nailwal explained the move was a result of unifying all its internal teams under Polygon Labs, leading to 100 jobs being cut.

On Feb. 23, Dapper Labs CEO Roham Gharegozlou confirmed another round of layoffs at his company following a first wave in November, noting it was part of restructuring “to improve our focus and efficiency.”

Immutable, the Australian firm behind another Ethereum layer-2 blockchain protocol, also reportedly cut staff during the month, reducing headcount by 11%.

Other firms to announce headcount reductions included crypto exchange Bittrex, NFT marketplace Magic Eden, institutional crypto custodian Fireblocks, software firm Protocol Labs and crypto media company The Block.

Payments company Affirm announced it was sunsetting its crypto program during the month amid a 19% staff cut, though it is not known how many employees from its crypto unit were dismissed as a result.

Kevin Gibson, founder of blockchain recruitment firm Proof of Search agreed that the pace of layoffs appears to have slowed compared to January.

“Jan was big as it followed boards [and venture capital] looking [at] 2022 results and preparing for the worst,” he said. “We have seen less laid-off candidates this month.”

“Companies are still building great products and the current teams are really stretched so more layoffs would be cutting into muscle right now for many companies.”

Gibson however warns that the United States securities regulator could still “bring about more pain,” while continued press coverage of Sam Bankman-Fried and the FTX collapse “is having an effect on the public perception of the sector and mainstream adoption.”

layoffs