‘Worst-case scenario’: Local Australian crypto exchange Swyftx lays off 40% of staff
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Australian cryptocurrency exchange Swyftx has announced it will lay off 40 per cent of its workforce, around 90 people, due to a worsening downturn in digital asset markets following the collapse of overseas exchange FTX.
In a message to staff on Monday, seen by this masthead, Swyftx chief executive Alex Harper said the layoffs were the company preparing in advance for a “worst-case scenario” of a continued decline in crypto markets next year and more “black swan” events like FTX.
“Our business is uniquely well-positioned to weather events like FTX,” Harper told staff. “But as much as we might wish it, we do not exist in isolation from the market and that’s why we are acting fast and acting early by significantly reducing the size of our team.”
“We do this with a sadness that is very difficult to put into words. Suffice to say, we will do everything in our power to support impacted colleagues.” Most of the layoffs will occur in the company’s research and development team.
Crypto businesses around the world are currently reeling from the fallout of FTX’s spectacular collapse, which has left its customers billions of dollars out of pocket and had knock-on effects for a raft of other exchanges and lenders.
The mass layoffs are also the latest in a line of difficulties for Swyftx, which had already cut back its workforce earlier this year by 21 per cent, around 74 employees, saying the decision was an effort to right-size the business’ cost base amid a falling market.
It also emerged last month the company – which announced a $1.5 billion merger with share trading service Superhero earlier this year – was on the hunt for new funding, which Harper stressed at the time was not for operational reasons, but to fuel expansion and bolster the business’ balance sheet.
The company announced a historic sponsorship deal with the NRL in February, which remains in place.
On Monday, the chief executive frankly admitted to staff that Swyftx had grown too fast, and had far more employees than any of its local competitors.
“We have the largest team of any fully owned and operated Australian exchange, with up to five times more team members than most of our main domestic competitors. We are simply far larger than we need to be to operate and grow next year and beyond,” he said.
The truth is that Swyftx grew too fast. Our world was very different at the start of the year and our forecasts were for global trading volumes to carry on rising for at least six months longer than they did.”
“We understand how difficult this news will be for impacted team members and their families, especially at this time of the year.”
The company is not the only local exchange to announce recent layoffs. Coinjar, one of the country’s first digital asset exchanges, laid off 20 per cent of its workforce last week, with chief executive Asher Tan saying the business had to “right-size parts of the team in response to poor market conditions”.
Swyftx was not directly exposed to FTX, but the company’s failure has severely shaken confidence in the once-ebullient crypto industry. Harper alluded to this, saying many staff members were “nursing a strong sense of injustice” about the actions of FTX.
“Cryptocurrency wasn’t the villain in this story, it was all too familiar human greed and indifference,” he said.
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