Reuters: Federal Reserve Announces Job Cuts

Despite public reassurances about the robustness of the U.S. economy, the Federal Reserve is preparing to downsize its workforce, according to Reuters. The central bank has confirmed plans to eliminate approximately 300 positions by the end of this year. This decision marks the institution’s first notable personnel reduction since 2010. Currently, the Federal Reserve system, which consists of 12 regional reserve banks, employs around 21,000 individuals.

Although the exact number of layoffs has not been specified, the majority of the reductions will target support roles. This includes specific technology positions that are now considered superfluous.

Interestingly, while this move has garnered attention, job cuts at the Federal Reserve are not unprecedented in its history. According to a Reuters report, the U.S. Federal Reserve system had previously made similar reductions, emphasizing the rarity but not the novelty of such decisions.

Federal Reserve Chair Jerome Powell recently voiced his surprise at the resilience of the U.S. economy in the face of rising inflation and interest rates. “Economic activity has been stronger than we expected, stronger than I think everyone expected,” Powell stated in a press conference following the central bank’s most recent monetary policy meeting. Reflecting this sentiment, Fed officials have adjusted their economic growth forecasts upwards and project a decline in unemployment rates.

However, Powell also recognized the inherent challenges in curbing inflation to sustainable levels. He hinted that achieving this might require a “softening” in the job market. While Powell is optimistic about the possibility of a “soft landing” — a situation where inflation is managed without inducing a recession — he also warned that such an outcome could be influenced by external factors beyond the Fed’s control.

Overview of the Federal Reserve’s History

Established in 1913 by an act of Congress, the Federal Reserve System, commonly known as the Fed, serves as the central bank of the United States. Its primary mission was to stabilize the American banking system. Over its century-long existence, the Fed has navigated through various economic challenges, from the Great Depression to the Great Financial Crisis and the recent COVID-19 pandemic. The institution has evolved, adapting to changing economic landscapes and implementing policies to ensure financial stability and economic growth. This website offers a comprehensive look into the Fed’s history, detailing its key events, policy actions, and the influential figures that have shaped its trajectory. The Fed’s journey reflects its commitment to safeguarding the nation’s financial health, ensuring the flow of money and credit, and responding to economic challenges with informed decisions.

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GameStop Sacks CFO, Lays Off Multiple Employees in A Fresh Turnaround Plan

GameStop, the largest video game retailer worldwide based in Texas, US, has sacked its Chief Financial Officer, Mike Recupero, and laid off several employees across departments. The layoffs, which were announced by the video game retailer through an internal memo to employees, are part of an aggressive turnaround plan, GameStop said.

Recupero, who joined GameStop about a year ago, was sacked as the firm considered him not “the right culture fit” and he was “too hands off” – meaning that he appeared to put more responsibility in the hands of team leaders and was much less present in the team’s day-to-day activities.

According to sources familiar with the events, GameStop Chairman Ryan Cohen was the one who triggered Recupero’s sacking. The company has therefore said that Diana Jajeh, the Chief Accounting Officer at GameStop, will now become the new CFO. 

The job cuts are on the side of the company’s corporate section rather than its retail stores. Those with knowledge of the matter said that the layoffs are aimed to reduce bloat as GameStop now focuses on investing in other areas.

The brick-and-mortar retailer has been making attempts to reinvent itself to catch up with the videogame industry which is largely moving online.

GameStop hired Mr. Cohen last year to lead the company’s turnaround initiative. The firm also brought fresh corporate leaders such as former Amazon executive, Matt Furlong, as its CEO, and another Amazon executive, Mike Recupero, as its Chief Financial Officer. Since the beginning of last year, GameStop hired more than 600 corporate staff.

In the memo sent to employees on Thursday, GameStop CEO Furlong stated that the firm has to take bold commitments as it invests in its digital future.

“This means eliminating excess costs and operating with an intense owner’s mentality. Everyone in the organization must become even more hands-on and embrace a heightened level of accountability for results,” Furlong said.

In a recent GameStop earnings call, Furlong said the firm has embraced efforts to refresh its brand and drive growth. He disclosed that the company has developed a redesigned app, attracted new users to its rewards program, and employed staff with backgrounds in e-commerce and blockchain gaming. He further said that GameStop plans to launch a marketplace for nonfungible tokens (NFTs) towards the end of this year.

Crypto Winter Concerns

Towards the end of May this year, the video game retailer launched a digital asset wallet for sending, receiving, and storing cryptocurrencies and NFTs ahead of its plans to launch an NFT marketplace later this year. The self-custodial Ethereum wallet is now available for download from GameStop’s website.

GameStop jumped into NFT pursuits at a time when crypto and equities markets collapsed as a result of interest rate hikes to contain soaring global inflation. The current economic crisis has left the NFT market collapsing, with NFTs sales and active wallets dropping massively.

The NFT market and other blockchain-associated assets like cryptocurrency are facing difficulties with the ongoing market crash, as their monetary values have significantly evaporated.

GameStop is not the only firm that recently announced job cuts. Last month, prominent crypto companies laid off thousands of employees as they prepared to brace for a long crypto winter.

Coinbase cut 1,180 staff (about 18% of its workforce) and withdrew job offers. BlockFi laid off a fifth of its employees, Gemini fired 100 employees and Singapore-based reduced its workforce by 5%, about 260 people. These major firms recently downsized their workforce, citing cost reductions and the need for increased efficiency.

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Cosmos Blockchain Developer Ignite Layoffs Employees, CEO Peng Zhong Resigns

Peng Zhong, the CEO of Ignite, the company behind the Cosmos blockchain ecosystem, announced his resignation on Friday. Zhong’s departure comes just a few months after the firm recently changed its name from Tendermint to Ignite as part of its reorganization plan.

In February, Tendermint rebranded itself to “Ignite” to bring fresh change and action within the company.

In late May, Ignite further split into two entities: Ignite and NewTendermint. The return of Jae Kwon, the original co-founder of Ignite, led to the company’s split into two business subsidiaries during that month.

With the split, Ignite’s original co-founder, Mr. Kwon, rejoined his old team as the CEO of NewTendermint while Mr. Zhong, the current CEO of Ignite, remained as CEO of the newly restructured Ignite.

Zhong’s resignation is considered to have been fueled by Kwon’s return to the company.

Kwon co-founded Ignite and its parent company, All In Bits Inc. in 2014. The executive stepped down as Tendermint’s CEO in 2020 after fierce disputes with some of its staff, but he retained a seat on the parent company.

With the split, NewTendermint was designed to focus on contributing to the core technology of the Cosmos blockchain ecosystem, while Ignite continued to focus on blockchain-based product development.

With a background in interaction design and front-end engineering, Peng focused on guiding blockchain development across the wider company. His sudden departure, therefore, raises questions about Ignite and New Tendermint’s futures.

Meanwhile, other reports also show that Ignite has announced massive job cuts of more than half its workers this week. The announcement came after Ignite’s CEO Peng Zhong disclosed on Friday that he would exit the company.

The departure of several other top executives at Ignite further puts the future of the company in question.

While Ignite laid off some workers, others volunteered to leave the firm in return for severance packages.

Some might have voluntarily left the company after details about the new organizational structure between the two entities remained vague for many weeks after they were announced.

The looming job cuts were first announced by Mr. Kwon when he returned to the firm in May. During his return, he stated that severance packages would be offered to some workers.

Job Cuts Follow the Bear Market

The current crypto crash forced Mr. Kwon to trim the headcounts of the company further than originally expected, sources familiar with the matter disclosed.

The ongoing crypto crash has caused a lot of FUD (fear, uncertainty, and doubt) in the community, not only among investors but also within companies. Crypto firms such as, BlockFi, Coinbase, and Gemini, among others, laid off hundreds of employees amid a meltdown in cryptocurrencies and a collapse in their token prices.

The crypto winter, triggered by the plunge of the Terra/Luna ecosystem, has put everyone into uncertainty whose fate is unknown when it will end.

Most firms appear to blame the current market conditions. The price of multiple coins has fallen following a new wave of selloffs. The difficult market conditions prompted some crypto firms like Celsius, BlockFi, Three Arrows Capital, among others, to face severe financial woes.

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BitPanda Lays off Hundreds of Employees, Citing Tough Market Conditions

BitPanda, a cryptocurrency trading platform based in Austria, announced on Friday that it will cut down the number of its headcounts to ensure sustainability. The firm said it will reduce the number of employees to about 730 from the more than 1000 it is currently stated to have on LinkedIn.

BitPanda’s founders said the company will let workers go as it scales down in response to changing market conditions.

While the founders cited the current crypto winter and wider global economic crisis, they also admitted their own failures:

“We reached a point where more people joining didn’t make us more effective, but created coordination overheads instead, particularly in this new market reality. Looking back now, we realize that our hiring speed was not sustainable. That was a mistake.”

BitPanda is also withdrawing some recent job offers and has notified the affected employees.

The company said it acknowledges the responsibility it has for its employees and their families. The firm stated it has put a top priority on supporting the affected workers to make a smooth transition to the next step in their careers.

“Affected employees will get packages that ‘go beyond’ employment law as well as one-on-one coaching with talent acquisition partners, references, and mental health support”, BitPanda said.

The announcement comes less than a year after BitPanda raised $263 million in a Series C funding round led by Peter Thiel’s Valar Ventures. The funding round gave the firm a fresh valuation of $4.1 billion.

BitPanda is the latest to follow several other cryptocurrency outfits that recently announced intentions to decrease their headcounts and trim down job offers in order to survive a downturn in the crypto market and the wider global economy.

Last week, Coinbase laid off 18% of its workers and froze hiring sprees as the market crashed.

Also, more than a week ago, Singapore-based exchange cut off 260 jobs to ensure it stays on track with its profitability goals for the long term. Gemini exchange also recently announced a reduction of about 10% of its workforce to address the current, difficult market conditions that are likely to persist for some time.

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Crypto.Com, BlockFi Announce Massive Layoffs as Economic Crisis Bites

Crypto exchange and lending platform BlockFi announced on Monday plans to cut over 400 jobs globally, as they come under pressure from difficult market conditions. said that it would reduce its workforce by 5%, that is about 260 employees. CEO Kris Marszalek disclosed the announcement via Twitter social media: “Our approach is to stay focused on executing against our roadmap and optimizing for profitability as we do so … That means making difficult and necessary decisions to ensure continued and sustainable growth for the long term by making targeted reductions of approximately 260, or 5%, of our corporate workforce.”

Meanwhile, BlockFi also announced on Monday that it is laying off 20% of its workforce, which is around 170 people. Zac Prince, BlockFi CEO, said in a tweet Monday that the crypto lending firm is reducing its “headcount by roughly 20% and the reduction impacts every team at the company. This decision was driven by market conditions that have had a negative impact on our growth rate and a rigorous review of our strategic priorities.”

Recession Fears and BlockFi have followed a series of various crypto firms faced with massive layoffs. Late last month, Bitso, one of the biggest crypto exchanges in Latin America, laid off 80 employees due to the recent downturn in the crypto market. Last month, Buenbit, an Argentina-based cryptocurrency exchange, also cut its workforce by 45%.

Earlier this month, Coinbase announced a freeze of its hiring for the foreseeable future and withdrew a number of accepted offers in order to deal with current macroeconomic conditions. Early this month, Bahrain-based crypto exchange Rain Financial Inc and Latin America’s largest crypto exchange 2TM also laid off over a dozen employees as digital asset markets remain red.

Crypto market is experiencing bad days as value of the digital assets plunged below $1 trillion on Monday, triggered by the announcement by Crypto lender Celsius Network that it paused all withdrawals and transfers between accounts, citing “extreme market conditions.”

The latest crypto crash marked the first time since January 2021 when the Bitcoin price fell to a low of $23,750 and the cryptocurrency market has reached as low as $926 billion, according to data site CoinMarketCap. In November 2021, the global crypto market peaked at $2.9 trillion but has been seeing a steady decline this year.

In the past two months, investors have dumped riskier assets amid high inflation and fears that interest rate raises by central banks will hamper growth. Extreme market conditions and central banks’ policy updates are exacerbating the consequences for digital assets.

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