Unchained Capital, Austin Texas based Bitcoin financial services firm, announced on Friday that it has cut its workforce by 15% as part of efforts to manage its business during the current cryptocurrency bear market.
Besides the job cuts, the Bitcoin financial services company also restructured its senior leadership team. The firm moved its head of business development Parker Lewis to the board of directors while its chief product officer Will Cole was given a senior advisory role.
Unchained Capital’s co-founder and CEO Joe Kelly said the company’s job cuts are due to constraints in funding for Bitcoin-backed loans. He stated that such constraints are part of a general decline of trading activities triggered by the year-long bear market.
Kelly clarified that Unchained Capital did not have any exposure to bankrupt crypto exchange FTX or its sister trading company Alameda Research or any other institutions which have lost client funds. He, however, said “funding for Bitcoin-backed loans has been materially constrained by recent market events.”
The executive said the firm is caught up in the current difficult crypto market environment and needs to plan for the long-term. He said some of the firm’s hires during the last bull-market period are now no longer sustainable.
Despite facing these issues, Kelly mentioned that the company’s loan book is still over-collateralized, with a collateral-to-principal ratio of 214%. The CEO said the affected employees will get compensation.
Worrying staff layoffs across crypto
Since this month, fresh layoffs in the crypto sector have returned against a backdrop of difficult market conditions.
When the crypto markets crashed in May this year following the collapse of the Terra stablecoin, major companies like Coinbase, OpenSea, among others, reduced their workforces. By September, users felt as if the worst crypto winter had passed, but in recent weeks the bloodletting has started afresh. The new round of reported layoffs and restructurings further have accelerated the industry’s shakeup this month.
On November 3, Stripe financial services firm imposed a 14% job cut on the company’s staff, equivalent to 1,000 employees. The firm cited “inflation, energy costs, higher interest rates, reduced investment budgets, and sparser startup funding” as reasons for the cuts.
On November 2, Flow blockchain developer Dapper Labs cut 22% of its headcount, impacting about 130 employees. The firm stated that “the macroeconomic environment” and the company’s growth from 100 to over 600 employees in less than two years prevented the firm from being “as aligned, nimble, and community-driven as we need to be.”
Other major crypto firms like Digital Currency Group lays, Galaxy Digital, BitMEX, Coinbase, among others, also announced fresh layoffs this month.
The persistent crypto winter further triggered by the FTX saga has put a lot of pressure on crypto companies, many of which are turning to job cuts to save costs and stay above water.
Author Nicholas Otieno