Israel-based multi-asset investment company eToro has joined digital assets-related companies cutting their employee headcount. The multinational social trading company has announced that it will cut its global workforce by 6%.
Finance Magnates reports that the layoffs will affect around 100 employees, with 55 of them from eToro operations in Israel. The company cites the current market conditions and a period of accelerated growth as what has necessitated the move.
Yoni Assia, eToro’s CEO and co-founder, told the news outlet that the headcount slashing would help the firm take a more balanced approach between growth and profitability.
“In light of current market conditions, we have been looking closely at how we manage our costs. After a period of hyper-growth, it is now necessary to take a more balanced approach between growth and profitability,” Assia said.
He added that the move will “help ensure sustainable long-term growth.” The retrenched employees will receive support from eToro in pursuing their careers.
The chief executive also assured investors that the company would continue to perform and emerge stronger from the downturn as it has often done since its founding 15 years ago.
“Despite the current headwinds, our underlying business remains healthy, our balance sheet is strong, and we are confident in our long-term growth strategy,” Assia remarked.
Digital assets firms are struggling amidst the market downturn
eToro’s employee downsizing is coming after the company decided to halt its bid to go public in the U.S. through a SPAC merger with Fintech Acquisition Corp earlier this week. In a press release, eToro revealed that the decision to shelve the merger was reached mutually.
The SPAC merger plan was started last year. According to reports, eToro is now planning a private funding round of between $800 million to $1 billion at a valuation of around $5 billion.
Several other digital asset firms have also announced headcount cuts amidst the financial and digital assets market downturn. Exchanges including Coinbase (NASDAQ: COIN), Crypto.com, Gemini, and Robinhood (NASDAQ: HOOD), have all laid-off employees citing various reasons.
Aside from exchanges, lending and borrowing like BlockFi and Celsius, as well as fund managers like Three Arrows Capital, have also been hit hard by the market downturn, falling into liquidity problems.
The Financial Industry Regulatory Authority (FINRA), Wall Street’s regulator, has stated that the employee cuts among digital assets companies are an opportunity for it to find talents to bolster its digital asset enforcement capacity.
Meanwhile, the bear market is also being seized by firms like Binance and FTX to expand their mergers and acquisitions, as well as bailout activities.
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