Zigzag – Crypto exchanges are cutting staff budgets to deal with bear markets. FTX nevertheless stands out from its peers. The company has been wise to break away from the herd of hypergrowth-obsessed sheep.
Against the grain: a crypto winter without frost for FTX
FTX CEO Sam Bankman-Fried posted on June 7, 2022, lessons in personnel management in series of tweets. These publications come in a bearish context for cryptocurrencies.
The current situation has pushed stock exchanges to lay off employees and freeze their recruitment. Binance and Gemini thus made these difficult decisions because of their poor financial performance. Are all major stock exchanges then condemned to do the same to ensure their sustainability?
FTX will not follow the same path as its competitors. The crypto winter would not change the company’s hiring plans in any way. Sam Bankman-Fried believes that FTX should continue to “hire great people”.
What are the factors explaining this ability of the company to increase its workforce despite the gloomy economic situation for the sector? The explanation can be summed up in one sentence: the stock market had the wisdom to do Zag, “when others do Zig”.
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Careful recruitment, rather than hypergrowth
To explain the FTX exception, Sam Bankman-Fried recalls his comments of February 8, 2022. The price of Bitcoin (BTC) was then still above $44,000.
The CEO of FTX had not announced at the time, a hiring freeze. However, he had already informed of the need “to substantially slow down hiring for a time “.
Sam Bankman-Fried actually understood quite early on the trap of hypergrowth that some companies fall into: productivity does not increase automatically with massive hiring.
Companies rapidly increasing their workforce often encounter coordination problems affecting their performance. They tend, for example, to lower their ambitions and their requirements as they recruit.
Hyper-growth companies also have difficulty aligning the pace of their recruitment with that of the understanding of the company culture by newcomers.
Unlike these companies, FTX has therefore not entered into this hiring race. He had decided to slow down his recruitments when his workforce reached 250.
And this decision was not motivated by the company’s financial situation. Above all, the stock exchange wanted to ensure that proper integration into their cultureof its new employees.
This management method thus allows FTX to develop its workforce, “regardless of market conditions”.
This continued recruitment shows a financially strong FTX. The exchange even continues to carry out other development projects despite the bear market.
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