Abstract
- Circle disclosed in its third-quarter results that it has laid off approximately 5% of its staff in order to better align the organization with its operating model and strategic priorities.
- The issuer, USDC, included $9.1 million in restructuring costs, which mainly consisted of severance payments and payments during the notice period; at the same time, its quarterly net profit increased by 5% to $226 million.
- Circle has joined the list of crypto companies that have carried out layoffs this year, which includes Coinbase, BitGo, Bitwise, and the Ethereum Foundation.
According to the third-quarter financial report released on Wednesday by Circle, the company behind this USDC stablecoin has laid off approximately 5% of its employees.
The company stated in the notes to its financial statements that this reduction in staff is “aimed at aligning our organizational structure more closely with our business model and strategic priorities.” Circle The number of employees affected or which teams were disbanded was not disclosed.
Circle incurred $9.1 million in restructuring costs this quarter, which mainly included cash payments related to the notice period and severance, employee benefits, and related costs. A portion of these costs was offset by $5.7 million in equity-based compensation, as the unvested shares held by departing employees were confiscated.
The layoffs occurred in a quarter when the company achieved profitability. According to the Circle report, the net profit from continuing operations was $226 million, an increase of 5% compared to the same period last year; total revenue and reserve income amounted to $865 million, a year-on-year increase of 17%. After adjustments, the EBITDA increased significantly by 85% year-on-year to $317 million.
A considerable portion of this growth came from sources outside of the Circle core business. Other revenues rose to 207 million US dollars, including 182 million US dollars from the pre-sale of its Arc blockchain token ARC. Reserve income—i.e., the interest earned by Circle from assets that support USDC—which is also its largest source of revenue—declined by 8% to 658 million US dollars due to the lower interest rates on these reserve assets.
USDC's average circulating supply increased by 8% compared to the same period last year, reaching $73.3 billion, but it remained flat at $73.9 billion at the end of the quarter. According to company data, USDC's share in the US dollar stablecoin market has dropped to 27%.
In his performance review, CEO Jeremy Allaire did not mention any layoffs, nor did he refer to this matter in a post on Wednesday that described the third quarter as an "important quarter for Circle." He stated that USDC accounted for 79% of all stablecoin trading volume, up from 66% a year ago; Circle's payment network reached an annualized trading volume of 41 billion US dollars by the end of this quarter, a 15-fold increase. Allaire wrote: "In January next year, the GENIUS Act will come into effect, and regulated digital dollars will enter the mainstream. Every layer of our platform is already online and ready for it."
Allaire posted on a social media platform that the third quarter is an important one for Circle.
USDC accounts for 79% of all stablecoin trading volume, up from 66% a year ago, with on-chain transfer amounts reaching 13.9 trillion US dollars (a 49% increase).
→ USDC The total amount of minting and redemption reached a record high of $208 billion, which is approximately $2.3 billion per day.Arc has gone live on the mainnet, with over 100 institutions and applications already participating...At the time of the layoffs, Circle was still expanding. In September, the company launched the public mainnet of its Arc blockchain, with BlackRock, DTCC, and Visa among its licensed validators. In October, Allaire stated that Circle planned to enter around 40 emerging and developing markets. Subsequently, the company also collaborated with payment technology firm ACI Worldwide to pilot USDC settlements on Colombia's instant payment network.
Layoff Wave in the Crypto Industry
Circle is the latest among a series of cryptocurrency companies that have carried out layoffs this year, with these companies attributing the reasons to a weakening market, artificial intelligence, or both.
Coinbase laid off 14% of its employees in May, with CEO Brian Armstrong attributing the reason to the sluggish crypto market and the company's adoption of artificial intelligence. In June, the Ethereum Foundation laid off 20% of its staff as part of a reorganization; custodian company BitGo also cut 15% of its workforce that month to focus on artificial intelligence and stablecoins.
Exchange Luno cut one-fifth of its global staff in July on the grounds of automation; meanwhile, crypto ETF issuer Bitwise laid off 14% of its employees in August.
