Singapore-based Amber Group is the latest virtual currency firm to succumb to the bear market as it announced a reduction of its staff strength in Hong Kong several months after considering going public.
A report from South China Morning Post (SCMP) noted that Amber terminated the employment of 40 individuals in Hong Kong, essentially halving the number of employees. The layoffs cut across several departments, including risk management, IT, and the entire audit and compliance unit.
Amber, backed by Sequoia Capital and Temasek Holdings, stated that tapering the workforce was needed to survive the uncertainties posed by the extended bear market. In a statement, the virtual asset service provider said it was bracing itself for an “extremely conservative position.”
Insiders have commented that Amber’s financial condition is grim, marked by the implementation of several dire cost-cutting measures. SCMP reports that Amber has relocated from its plush office complex in central Hong Kong to Causeway Bay.
Aside from the relocation, the company has reportedly delayed the payments to third-party vendors, with some partners being owed for up to 12 months. Back in October, Amber introduced the Primary Share Units—a scheme that deducted employee monthly salaries as subscriptions for the company shares.
While the true financial condition of Amber Group is unclear, there are fears that the firm’s trouble runs deeper. Its retail arm WhaleFin has terminated its sponsorship deal with English football club Chelsea, a sign of lingering financial pains.
In 2021, there was widespread speculation of the firm going public during the bull run, but the whispers died following the ripple effects of FTX’s and Terra’s implosions.
“2021 was its glory days. People were looking forward to a potential IPO. But now, people don’t go to work feeling motivated – especially when they are not clear on the firm’s strategic direction without much communication from management,” one insider commented.
Amber’s CEO Michael Wu is optimistic that Amber would be a part of an exclusive group of large virtual currency firms remaining after 2023.
The bad streak rolls on
While digital asset enthusiasts would have hoped that the streaks of industry layoffs would have been left in 2022, the trend appears to have continued into the new year.
Coinbase (NASDAQ: COIN) recently cut its workforce by 20%, while Fidelity-backed OSL reduced its headcount despite claiming to have no exposure to FTX’s collapse.
In 2022, industry giants like Gemini and Crypto.com laid off a chunk of their staff, with smaller exchanges toeing the same path as the “crypto winter” froze the ecosystem.
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