Swyftx, an Australian cryptocurrency exchange, will lay off 40 percent of its staff, around 90 employees, because of the worsening downturn in cryptocurrency markets, brought in by the collapse of FTX.
Swyftx plans to let go of 90 of its 259 strong staff, in expectation of a potentially sharp fall in global trade volumes in the first half of 2023, as well as aftershocks from Sam Bankman-Fried's FTX bankruptcy.
Alex Harper, Swyftx chief executive, said the layoffs were the company preparing in advance for a worse-case scenario of a continued decline in crypto markets in 2023 and more black swan events like FTX.
Swyftx Does Not Exist in Isolation
Harper explained that Swyftx is uniquely well-positioned to weather events like FTX. "But as much as we might wish it, we do not exist in isolation from the market and that's why we are acting fast and acting early by significantly reducing the size of our team. We do this with a sadness that is very difficult to put into words."
The Australian crypto exchange is ready to do everything in its power to support impacted colleagues. Harper highlighted that most of the layoffs will occur in the company's research and development team.
It should be noted that Swyftx had already cut back its workforce earlier in the year by 74 employees. The company outlined its decision to be an effort to right-size Swyftx's cost base amid a falling market. Moreover, Swyftx had announced a $1.5 billion merger with Superhero, a share trading service platform, and a historic sponsorship deal with the NRL in February.
Business Grew Too Fast
To make the layoffs softer for its employees, Swyftx told its staff that the company had grown too fast, and had far more employees than any of its local competitors. Harper said Swyftx has the largest team of any fully owned and operated Australian exchange – up to five times more team members than most of their main domestic competitors. "We are simply far larger than we need to be to operate and grow next year and beyond."
The executive pointed out 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. We understand how difficult this will be for impacted team members and their families."
Despite not being directly exposed to FTX, Sam Bankman-Fried's failure has severely shaken confidence in the once-thriving crypto industry.
