CoinDCX, a popular Indian cryptocurrency company backed by Coinbase Ventures, has announced a workforce reduction of 12% in response to market challenges. The decision to lay off 71 employees out of a total of 590 comes as the company faces the impact of a prolonged bear market and the introduction of a Tax Deducted at Source (TDS) on domestic exchanges.
The move follows an internal restructuring earlier this year, where CoinDCX implemented various measures to optimize costs and enhance efficiency. The company has also realigned its priorities and resized certain teams to ensure profitable and sustainable growth.
In a statement, CoinDCX founders Neeraj Khandelwal and Sumit Gupta acknowledged the difficult decision, citing the need to adapt to current market realities. They expressed their understanding of the emotional toll the layoffs may have and emphasized their responsibility in making the best decisions for the business.
CoinDCX achieved unicorn status in August 2021 after securing $90 million in a Series C funding round. The company’s valuation further increased to over $2 billion with an additional $135 million raised in April 2022.
However, the Indian government’s enforcement of significant taxes on cryptocurrencies has impacted the revenue of many crypto firms, including CoinDCX. The introduction of a 1% TDS on all transactions, combined with the global downturn in the crypto market, has led to decreased trading volumes.
Despite hopes for a reduction in the tax rate, the finance ministry did not grant any relief, maintaining the 1% TDS and a 30% tax on profits generated from digital assets. The government only collected around $7.4 million in TDS on crypto transfers during July-December 2022.
CoinDCX’s decision to reduce its workforce reflects the challenges faced by the cryptocurrency industry in India. The company remains committed to navigating these obstacles and continuing its growth trajectory in the evolving market.
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