The broader crypto market downtrend has forced digital asset companies to continue cutting jobs to stay in business, with Galaxy Digital the latest to follow suit.
According to reports, the Michael Novogratz-led firm is on the verge of reducing its staff strength by 20% following the underwhelming market performance. Insider sources revealed that the company had not released the exact number of staff it plans to sack, but the range is between 15-20%.
Moreover, Galaxy Digital has a total of 375 workers in its book; this implies that the number may be higher than the quoted percentage.
According to the company’s spokesperson, Michael Wursthorn, Galaxy Digital always focuses on having an optimal structure and strategy. “As a result, this is necessary to ensure stability, and the firm will reveal its plans as necessary,” added Wursthorn.
Last August, Galaxy Digital’s second-quarter loss stood at a whopping $554.7 million, in contrast to the $182.9 million loss for the same period in 2021. Additionally, data shows that its assets under management (AUM) slipped by 40% from Q1 to stay at $1.7 billion.
For Q1 2022, Galaxy Digital recorded a $111.7 million net loss compared to $858.2 million in profits for the same period in the previous year. This led to its AUM dropping 5% to $2.7 billion for the period under review.
Also read:Galaxy Digital Suspends Acquisition Plan
A week after the woeful Q2 performance result, the firm revealed that it was putting its planned takeover of BitGo on hold. Galaxy Digital had previously wanted to acquire the crypto fund manager as part of its expansion drive. However, the underwhelming market performance prompted the company to shelve its plan.
Moreover, in an official press release, the firm admitted that BitGo has yet to provide the audit financial report for last year as required in the initial agreement.
According to previous reports, Galaxy Digital’s acquisition of BitGo was expected to be finalized last month. However, BitGo reacted to the failed deal by filing a lawsuit against Galaxy Digital.
The aggrieved party is seeking $100 million in damages against Galaxy Digital after the latter pulled out of the last-minute takeover deal.
To gain control over the dwindling market fortunes and stabilize operations, crypto exchanges and service providers see the need to reduce their staff strength. Thanks to the crypto winter, many firms have gone into bankruptcy, with others struggling to stay afloat.
Nonetheless, the crypto market is volatile, and the continuous price swings indicate another worrying trend for the fledgling sector.
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