Australia’s Banxa digital currency exchange is the latest to join firms in the industry cutting down their workforce. The publicly listed company said it has laid off 70 employees, representing 30% of its staff.
The Australian Financial Review (AFR) reports that the message was conveyed to the employees via a letter from Banxa’s CEO, Holger Arians. Arians stated that the company is anticipating another “crypto winter” and needs to reduce costs, or else its success could be threatened in the long run.
“Banxa must take decisive actions to reduce costs now, or else our company won’t be able to succeed over the long run… Like many others in our industry [we] are anticipating another crypto winter, with trading volumes declining significantly,” he said in the letter, as reported by AFR.
The chief executive added that the company grew too quickly, so further staff cuts may be necessary if market conditions worsen. Among the employees affected is the exchange’s European managing director Jan Lorenc.
Founded in 2014, Banxa has employees across seven countries, including Australia, Lithuania, the Netherlands, the Philippines, the U.S., the U.K., and Canada. The firm began being publicly traded on the Toronto Stock Exchange’s early-stage TSX Venture Exchange in January 2021.
Banxa has not fared well this year as a public company and in its earnings from digital currency trading fees. Per data from CNBC, the company’s shares are down 59.66% year to date.
Banxa not the only cautious digital assets firm
The situation with Banxa is not peculiar as several other established digital currency firms have also announced staff redundancies amidst the price decline of digital currencies that have affected investor sentiment and led to reduced market activity.
June has seen Coinbase (NASDAQ: COIN), Crypto.com, Gemini, and BlockFi disclose that they are cutting down their workforce to better weather the storm. Coinbase cut down about 18% of its employees—or around 1,100 people— globally. While BlockFi gave 20% of its employees the boot.
Other smaller players in the market have not been left out of the layoff spree across the market. BitOasis and Rain Financial in the Middle East have also cut staff to stay profitable in the current market.
The market has taken severe hits from the prevailing global macroeconomic environment. Rising inflation, geopolitical tension, and policies being made to combat them, including the U.S. Federal Reserves rate hikes, have all played roles in the digital currency market decline.
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