Many popular crypto companies laid off employees in 2022, and the process still continues to cut costs and stay safe during this year’s ongoing crypto winter. Being victimized by the industry’s crisis, Australia’s largest crypto gaming company announced Wednesday morning that it is cutting 11% of its workforce.
James Ferguson, chief executive and co-founder of Immutable, wrote to employees in a note, seen by The Sydney Morning Herald:
“We will be reducing the size of our team by approximately 11 percent.”
Ferguson stated that the layoffs are happening because the company wants to maximize how long its cash reserves last and deploy its resources to the most important and appropriate projects.
He showed his grief in response to the statement:
“This is difficult news, and I am sorry to all Immutables impacted by these changes. As CEO, I am deeply aware that these role eliminations will directly impact the lives of many, and I take full ownership for these actions.”
The report said that affected workers would receive an average of 10 weeks’ redundancy pay, laptops, outplacement, coaching and counseling services, and excess company shares. Healthcare services would also be extended for the company’s US employees.
Immutable’s financial report to the Australian Securities and Investments Commission (SEC) revealed that the previous year’s financial record could be another factor contributing to employee layoffs. According to SMH, these financial submissions to the SEC show that the company earned $27 million but had expenses of $83 million last year. However, an annual loss of $56 million occurred.
A spokesperson for Immutable told the Sydney Morning Herald that cash on the company’s balance sheet totaled $280 million. This gives the company at least four years of cash reserves at its current expenditure rate.
In addition to the layoffs, the gaming company is restructuring to help cut unnecessary costs. Currently, they have dismissed recruiting plans to focus on high-priority areas, the spokesperson revealed.
Founded in 2018 and headquartered in Sydney, Immutable has grown rapidly in recent years. Notably, in early 2022, the company secured a capital of $200 million from investors led by Singapore’s Temasek to support the company in all its growth plans.
The Ongoing Crypto Crisis Is Kicking Companies’ Staff
The crypto industry suffered last year as investors pulled away amid fears of rising interest rates following the collapse of crypto giants, including the Terra/Luna cryptocurrency project and the FTX exchange.
This isn’t the first time Immutable has fired employees to get its way in financial matters. In June 2022, the company laid off 20 employees, representing about 6% of its workforce.
Besides these planned layoffs, the crypto company is making organizational changes to recoup financial losses. According to SMH, it involves shifting spending to core areas and outsourcing video game development to alternate partners. With these changes, Immutable plans to focus on mastering Web3 and cryptocurrency technologies.
“We have unwavering conviction in the significant opportunity we are executing against, and we know there is still so much innovation and transformation yet to come for web3 gaming.”
Recently, Magic Eden announced in a letter that it had laid off 22 employees. Last month, Gemini cut 10% of its staff, the third round of layoffs. Moreover, popular crypto companies such as CoinTracker, Luno, Crypto.com, and Coinbase announced layoffs earlier this year.