As the crypto winter shows little to no end, Australian crypto giant Banxa wants to save itself by rescinding the employment contracts of a cross-section of its workforce.
Banxa, a crypto firm based in Australia, disclosed via an internal memo that it would be laying off 30% of its employees in light of the possibility of extended crypto winter. The move will see the firm reduce its headcount to 160 from the highs of 230 that it achieved in a rapid expansion strategy.
According to Holger Arians, Banxa’s CEO, the decision to terminate the contracts of staff was a weighty decision and the executive team is in a “solemn” mood. However, it was necessary for the firm to bite the bullet in order to “succeed over the long run.”
A spokesperson for Banxa corroborated Arian’s statement, saying that the firm will be able to prioritize higher margins amid the industry’s harsh macroeconomic conditions. The spokesperson remained optimistic over the future of Banxa while noting that the firm is a “veteran company of multiple industry cycles” with a healthy balance sheet.
Cost-cutting measures and a year-long drought
Prior to the termination of contracts, Banxa had employed cost-cutting measures to improve profitability. Insider reports noted that the firm had canceled all internal events like dinners and get-togethers to brace itself for economic turbulence since the start of June.
Arians told employees that a restructuring plan and extensive redundancies were inevitable. “Like many others in our industry, we are anticipating another crypto winter, with trading volumes declining significantly.”
He added that the company’s market capitalization fell by almost half in a matter of days and analysts predict that “these conditions will most likely continue for another 12 months”.
Crypto’s job woes continue
Banxa’s decision to lay off staff is one in a long line of crypto firms parting ways with their staff. Coinbase announced that it was reducing staff strength by 20% and within days, Gemini and BlockFi made similar declarations.
Apart from the layoffs, the industry was rocked by the scandals of Terra, Celsius, and other lending firms imploding under the weight of the chaos. Bitcoin (BTC) spiraled to $18,000 while the market capitalization of the entire industry dipped below $1 trillion for the first time in 18 months.
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