Queensland cryptocurrency exchange Swyftx has shed another 90 jobs in the wake of the FTX implosion.
The business, laid off around 36% of its remaining workforce of 250 people, having cut 74 roles less than four months ago, when the headcount sat at 320.
The business announced a merger with investment platform Superhero in June this year, laying claim to being the country’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 has seen its after-tax profit drop by $12 million – around 25% – last financial year amid plummeting valuations for cryptocurrencies.
Swyftx made an after-tax profit in FY2022 of $36.7 million. Revenue grew by around 50% on the previous financial year to $153 million, with its crypto exchange generating $131.5m in income.
The fintech is currently on the hunt for fresh capital, described as “a small bridging round while funding markets are subdued and cost of capital is high”.
A company spokesperson said it has no exposure to FTX, but the business made the staffing cuts in expectation of a potentially sharp fall in global trade volumes in the first half of 2023 and further aftershocks from FTX’s collapse.
“Prudently managing the business remains our priority next year,” they said. “We remain one of the two largest exchange teams in Australia, meaning we’ll continue to provide the highest standards of compliance, security and customer experience in the ANZ region.”
Cofounded in 2018 by Alex Harper and Angus Goldman, Swyftx gas more than 630,000 retail and corporate investors.
Harper messaged his team today after a townhall to announce the departures, confessing that “the truth is that Swyftx grew too fast” before being buffeted by changing market conditions.
“We have to prepare in advance for a worst-case scenario of further significant drops in global trade volumes during H1 next year and the potential for more black swan-type events,” he wrote.
“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.”
While November delivered an increase in trade volumes and this week’s unqualified financial audit, Harper said they are “looking at costs through a lens of extreme caution” and the business “cannot take risks” and needs to make its costs base “more consistent” with the rest of the industry.
“We are simply far larger than we need to be to operate and grow next year and beyond. We were genuinely hopeful in August that the revenue modelling we’d done would not require any further reduction in staff numbers, but the FTX situation has forced us to plan for a period of diminished trading activity” he wrote
“In this, we are not alone, with many exchanges now in the process of scaling down their teams.”
Last week Melbourne exchange CoinJar cut 20% of its 50-member team.
Harper said the job cuts would have occurred irrespective of any potential growth equity raise.
“Every tech business in the world right now is scrutinising their costs and Swyftx is no different,” he said.
“Investors expect discipline and our new normal will be to aggressively explore options for efficiencies and cost reductions, regardless of market conditions.”
The merger with SuperHero has yet to be completed. In February this year, the crypto exchange announced a three-year sponsorship deal with the NRL.