Billionaire Mike Novogratz May Cut 20% of Workforce at Galaxy Digital – Signs of Bear Market?
Michael Novogratz, the founder of the US-based crypto financial services firm Galaxy Digital Holdings, could let go of up to 20% of the workforce amid the market downturn. Crypto exchange BitMEX has also reduced its staff.
According to a report by Bloomberg, there is no official plan for a workforce reduction at Galaxy Digital yet – rather, it is still being considered and developed, meaning that the final number of fired workers is still unknown.
The report did say, however, that,
“The final number could be in a range of 15% to 20%, according to people familiar with the matter.”
The company reportedly has 375 employees across the world, per the data at the end of the second quarter, meaning that 75 people could possibly be fired.
Galaxy’s spokesperson Michael Wursthorn was quoted as saying that,
“We are always considering optimal team structure and strategy and will share future plans when finalized. While our industry continues to face macroeconomic headwinds, Galaxy remains focused on building for the future state of institutional adoption, and on enhancing long-term shareholder value.”
Galaxy Digital is scheduled to report third-quarter earnings results on November 9. But it clearly hasn’t been smooth sailing. The shares dropped a whopping 70% this year, and it saw its losses more than double in Q2 from a year earlier. This loss, said Bloomberg, is “due to unrealized losses on digital assets and on investments in its trading and principal investments businesses.”
Furthermore, Novogratz backed Terraform Labs, the company behind Terra/LUNA, which saw a massive collapse, pulling the market down and drawing the eye of the regulator (even more) towards the crypto sector, particularly stablecoins.
“With hindsight, looking at Luna, you can’t offer people 18% interest, as they did with Anchor, and not have the world all run into yours,” Novogratz said in June, referring to the Terra-based lending and borrowing protocol that (in)famously offered users yields of up to 20% on terraUSD (UST) deposits.
Then in October, Novogratz said he expected to see “a rough few months of markets that are pricing in tremendous amount of bearishness” due to inflation and geopolitical risks.
Also in October, the American billionaire and investor argued that bitcoin (BTC) would likely see a breakout once the US Federal Reserve Chair Jerome Powell "gives up the fight against inflation."
At 11 UTC on Wednesday morning, BTC was trading at USD 20,408. It was down 1% in a day and up nearly 2% in a week.
BitMEX reducing its workforce by 30%?
Galaxy Digital would be far from the only company to let go of a part of its workforce amid the ongoing market downturn.
Crypto exchange BitMEX has reportedly reduced its workforce recently, though it’s unclear by how much. This has happened as it “pivots back to focusing on derivatives trading,” CoinDesk reported.
It cited a spokesperson who, it said, “dismissed a report suggesting that 30% of its staff had been let go.”
The Block reported that a spokesperson initially said that 30% of the workforce was affected by the cuts, but clarified later that the figure is lower, without specifying further.
Per the spokesperson,
"We are going to refocus on liquidity, latencies and a vibrant derivatives community including BMEX Token trading. [...] As an undesirable consequence, we had to make changes to our workforce.”
The reduction follows the departure of CEO Alexander Höptner at the end of last month.
Meanwhile, among a number of firms letting go of their staff, in June, crypto lender BlockFi CEO Zac Prince announced that “after taking significant time to plan and consider, we are reducing our headcount by roughly 20%.”
Also in June, major crypto exchange Coinbase said it would reduce its workforce by around 18% in order to cut expenses and increase efficiency ahead of a possible recession. “The Plan involves a reduction of the Company’s workforce by approximately 1,100 employees,” it said at the time.
Exchange Crypto.com decided to cut almost 5% of its workforce, or about 260 employees, that month, in order to "ensure continued and sustainable growth for the long term" amid the market downturn.
Crypto exchange FTX, meanwhile, claimed that it was not going to slow down hiring new employees despite the adverse market conditions, and just recently, at the end of October, major crypto exchange Huobi Global denied mass layoff claims and allegations that two of its top executives have resigned.
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