The Australian cryptocurrency exchange SwyftX has announced that it will lay off 40% of its total workforce, roughly 90 employees, due to the ongoing decline in digital asset markets following the implosion of Bahamas-based crypto exchange FTX.
In a memo sent out to staff this morning, the CEO of Swyftx Alex Harper said the massive layoffs come as the company gets ready to weather the “worst-case scenario” of continued turmoil and decreasing trading activity in the cryptocurrency market. Harper added that the decision was made as the industry braces itself to endure more “black swan-type” events.
While Harper said that the layoffs could be attributed to the continued market downturn spurred on by the collapse of FTX, he reassured team members that the exchange has “no direct exposure to FTX”. Still, Harper admitted that at the end of the day, SwyftX hired too many staff at the beginning of the year based on rosy projections for the industry.
“We have the largest team of any fully owned and operated Australian exchange, with up to five times more team members than most of our main domestic competitors. We are simply far larger than we need to be to operate and grow next year and beyond,” he said.
“The truth is that Swyftx grew too fast. Our world was very different at the start of the year and our forecasts were for global trading volumes to carry on rising for at least six months longer than they did.”Alex Harper, CEO of SwyftX
This announcement marks the second round of substantial layoffs from SwyftX in just four months. In late-August the exchange fired 74 employees, cutting its workforce by 21%. At the time, Harper explained that the move was made to “stabilise” the costs of the business amidst a sliding market.
According to a report from the Australian Financial Review, on November 22nd, SwyftX made a surprise move to seek a “short-term capital injection”, in a bid to bolster its balance sheet and fund longer-term growth plans.
Addressing this recent capital raise Harper said that the “new normal” for tech businesses would be to explore further cost reductions.
“I know some of you have asked about our plans to raise funds. I do need to say that we’d be taking this action irrespective of any potential growth equity raise. Every tech business in the world right now is scrutinising their costs and Swyftx is no different. Investors expect discipline and our new normal will be to aggressively explore options for efficiencies and cost reductions, regardless of market conditions.”