Crypto.com CEO is the latest boss to blame AI as he lays off 12% of staff

The CEO of Crypto.com, Kris Marszalek, announced on Thursday that he was laying off 12% of the company’s staff. Marszalek cited AI as the driving factor behind the layoffs. Here’s what you need to know.

What’s happened?

On Thursday, Crypto.com CEO Kris Marszalek took to X to announce that the company was cutting 12% of its staff. Marszalek cited AI as the reason for the layoffs.

In the X post, Marszalek said that Crypto.com was “joining the list of companies integrating enterprise-wide AI” and suggested that those who do not embrace artificial intelligence won’t be around for long. 

“Companies that do not make this pivot immediately will fail,” Marszalek wrote. “Companies that move slowly will be left behind.”

Marszalek said that, as a result of this embrace of AI, Crypto.com would lay off around 12% of its workforce in “roles that do not adapt in our new world,” noting that the layoffs would be “targeted.”

Marszalek is hardly the first CEO to blame AI for layoffs. 

Most recently, Block CEO Jack Dorsey said he would lay off 4,000 employees, primarily due to a shift toward greater reliance on AI.

However, some question whether an embrace of AI tools is actually the driving factor behind tech industry layoffs, or whether CEOs are simply using AI as a smokescreen to mask other reasons.

Crypto.com recently paid the largest sum ever for a domain name

Of course, it’s not hard to believe that Marszalek truly believes his own words about the seismic impact AI will have on companies in the months and years ahead, especially after he purchased the AI.com domain name in February for a record-breaking $70 million—the most ever paid for a domain name.

This week’s layoff announcement also comes after the company’s own cryptocurrency, Cronos (CRO), has suffered a dramatic fall in value over the past several months.

After rising from a low of around $0.08 in early July, CRO spiked to over $0.32 cents by late August. But since then, the token’s value has crashed by around 70%, falling to around $0.07 as of this writing, according to CoinMarketCap data.

Popular cryptocurrencies such as Bitcoin and Ether have also seen their values decline since last summer.

This isn’t Crypto.com’s first round of layoffs

This week’s announced layoffs are not the first time that Crypto.com has cut staff.

In June 2022, the firm let go of about 5% of its workforce, totaling about 260 employees. At the time, Marszalek said the layoffs would allow the company to “stay focused on executing against our roadmap and optimizing for profitability as we do so.”

Then, in January 2023, Crypto.com announced that it would eliminate approximately 20% of its workforce, citing the fallout from the collapse of cryptocurrency exchange FTX.

“We are joining the list of companies integrating enterprise-wide AI,” a Crypto.com spokesperson told Fast Company when reached for comment. “As we continue to prioritize resources around key growth areas and drive efficiencies across our business, we reduced our workforce by approximately 12 percent. All impacted team members have been notified and are receiving resources to support their transition.”

The company did not say how many employees were impacted.

This story is developing…

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