Queensland cryptocurrency exchange Swyftx has cut another 90 jobs in the wake of the FTX implosion.
The company laid off about 36% of its remaining workforce of 250 people, having cut 74 positions less than four months ago, when the workforce was 320.
The company announced a merger with investment platform Superhero in June this year, claiming to be the nation’s newest fintech unicorn, valued at $1.5 billion.
But as part of the deal, Swyftx reportedly still owes SuperHero more than $50 million, and the company saw its after-tax profit fall by $12 million last fiscal year — about 25% — amid falling valuations for cryptocurrencies.
Swyftx posted an after-tax profit of $36.7 million in FY2022. Revenue grew about 50% from the previous fiscal year to $153 million, with the crypto exchange generating $131.5 million in revenue.
The fintech is currently on the hunt for new capital, described as “a small bridge while funding markets are subdued and capital costs are high.”
A spokesperson for the company said it has no exposure to FTX, but the company has implemented the staff cuts in anticipation of a potentially sharp drop in global trading volumes in the first half of 2023 and further aftershocks from the collapse of FTX.
“Prudent management of the business remains our priority next year,” they said. “We remain one of the two largest exchange teams in Australia, which means we will continue to provide the highest standards of compliance, security and customer experience in the ANZ region.”
Swyftx was co-founded in 2018 by Alex Harper and Angus Goldman and has attracted more than 630,000 private and corporate investors.
Harper messaged his team after a town hall today to announce the departure, confessing that “the truth is that Swyftx grew too fast” before being pummeled by changing market conditions.
“We need to prepare in advance for a worst-case scenario of further significant declines in world trade volumes during the first half of next year and the potential for more black swan-type events,” he wrote.
“We are not isolated from the market, which is why we act quickly and early by significantly reducing the size of our team. We do this with a sadness that is very difficult to put into words.”
While November brought a surge in trading volumes and this week’s unqualified financial audit, Harper said they are “looking at costs through a lens of extreme caution” and that the company “cannot take risks” and needs to make its cost base “more consistent.” with the rest of the industry.
“We are just much bigger than we need to be able to operate and grow next year and beyond. We were genuinely hopeful in August that the revenue modeling we had been doing would not require further headcount reductions, but the FTX situation forced us to plan for a period of reduced trading activity,” he wrote.
“We are not alone in this, with many exchanges now in the process of downsizing their teams.”
Last week, Melbourne Exchange CoinJar cut 20% from its 50-member team.
Harper said the job losses would have occurred regardless of any increase in growth potential.
“Every technology company in the world is currently scrutinizing their costs and Swyftx is no different,” he said.
“Investors expect discipline and our new normal will be to aggressively explore options for efficiency and cost savings regardless of market conditions.”
The merger with SuperHero has yet to be finalized. In February this year, the crypto exchange announced a three-year sponsorship deal with the NRL.