Swyftx has announced plans to lay off 40% of its staff, citing the crypto market slowdown. In the December 5 communication, the Australian-based exchange confirmed firing 90 employees, citing strategic preparation to navigate a potentially colder crypto winter.
Advance Preparation for Extended Market Slowdown
Swyftx chief executive Alex Harper dismissed exposure to the fallen FTX. However, he admitted that the exchange is not immune to the FTX contagion and potential decline in trading volumes.
Harper indicated that fallout from the embattled FTX could cause significant drops in the crypto market.
Consequently, Swyftx cannot overlook the need for prior preparation for the worst-case scenario. In particular, the significant decline in the trade volumes in the first two quarters could hurt crypto exchange providers. Swyftx is no exception to such drops that could worsen if black swan types recur.
The Swyftx executive clarified that the likely decrease in trading volumes triggered the 40% headcount reduction. While the trading volume increased in early November, firing the 90 employees will enable Swyftx to battle the market slowdown as the FTX collapse case takes shape.
40% Staff Cut Explained
Admitting the interlinked nature of the crypto industry, Harper revealed that reaching the tough decision of axing staff who contributed to your rise is saddening. Nonetheless, the deepening crypto market makes the tough decision inevitable to survive 2023.
Also read:Harper assured investors and users of Swyftx’s unique positioning to overcome FTX-like events. He added that Swytx operates in the inter-linked crypto industry, therefore, can never isolate from the sectoral trends. This realization informs the 40% staff cut to ensure resources align to weather future market turmoil.
The Swyftx executive assured of a strong balance sheet that has remained intact though indirectly hurt by the sudden FTX collapse. He illustrated that Swftx holds users’ funds in a matched ratio and ruled out lending the clients’ assets to affiliate firms and third parties.
Swyftx Way Forward Strategy
Harper confessed Swyftx’s strategic plan involves running more risk-averse operations supported by decisions such as the current staff cuts to ease the operational cost burden.
While the company realizes substantial revenue, Swyftx will prioritize protection against the post-FTX crisis through exceptionally cautious cost-monitoring.
Earlier in August 2022, when announcing a 21% staff cut, Harper lauded their contribution when the company realized accelerated growth in 2021. Harper confessed that despite axing 74 employees in August, it still runs a larger workforce than the current operation and growth requirements.
Considering the market is off-peak, Harper announced the research and development units would bear the highest staff cuts. Harper ruled out affecting staff in customer support, compliance, and security services considered priority areas.
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