On Friday, July 14, insider sources revealed that Binance plans to lay off between 1,500 and 3,000 employees globally this year, according to media reports. The layoffs are said to be a response to an ongoing investigation by the U.S. Department of Justice, which could potentially culminate in a settlement.
Media outlets earlier on Friday reported that Binance has already cut 1,000 jobs. The total mentioned by the insiders includes these layoffs. They said that more workers, particularly customer service personnel, were let go this week.
Before the layoffs, Binance had an estimated global workforce of about 8,000.
A Binance spokesperson disputed the figure of up to 3,000 job cuts, describing the number as "simply not correct." The spokesperson stated:
As we prepare for the next significant crypto bull market cycle, it is clear that we need to focus on the talent density throughout the company to ensure we maintain agility and vitality. This isn't about downsizing but reevaluating if we have the people who can stand alone and have the requisite expertise.
Over the past few months, Binance has faced major regulatory challenges, having been sued by the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) for allegedly mishandling customer assets and operating an illegal, unregistered exchange in the United States. Since the US regulatory bodies brought forth the lawsuits, Binance itself has suffered significant losses, with a steep drop in market share, and an exodus of funds from the exchange amounting to hundreds of millions of dollars. Furthermore, the company has seen departures from key executives, including its general counsel, chief strategy officer, and head of investigations. All the while, Binance founder Changpeng Zhao has been trying to downplay investor concerns about Binance.
In addition, last week, media reports suggested that Binance's management is increasingly worried that the U.S. Department of Justice will bring formal charges against the company and Changpeng Zhao. Zhao has consistently refused to relinquish control of the company or resign, with many inside the company believing his continued presence could land Binance in further trouble.
Insiders indicate that the Department of Justice's investigation into Binance could fundamentally reshape the company. If Binance opts to settle the Department's charges, it could face billions of dollars in reparations. U.S. federal prosecutors have been considering charges against Binance for alleged violations of anti-money laundering regulations and evasion of sanctions, which could make it difficult for Binance, or its founder Changpeng Zhao, to continue receiving operating licenses.
