Brisbane, Melbourne among hardest hit in global crypto sackings

Two Australian cities are among the worst for crypto lay-offs as start-ups slash their headcount after overly aggressive expansions.

Alex Harper and Angus Goldman founded cryptocurrency player Swyftx in 2018. Source: Supplied.

Australian cities have been some of the hardest hit globally by crypto lay-offs this year, with start-ups slashing their headcount after overly aggressive expansions in 2021.

Research from crypto tracker CoinGecko provided to The Australian shows that Brisbane and Melbourne took the 14th and 15th positions respectively for crypto lay-offs by cities, representing a combined 3.3 per cent of the industry’s lay-offs globally this year.

Almost half of all crypto lay-offs were accounted for by San Francisco, Dubai and New York, with companies based there making up a combined 49.8 per cent of employees laid off globally in the year to date.

The top 15 cities dominated crypto lay-offs, accounting for 92.8 per cent of the industry’s lay-offs in the year to date.

“Many companies have expanded aggressively during the last bull market run, instead of growing sustainably or being prudent with finances and investments,” Bobby Ong, chief operating officer and co-founder of CoinGecko told The Australian.

“The crypto winter, bearish macroeconomic environment and looming recession exposes which companies have been ‘swimming naked’ and can no longer keep up with their earlier excesses.”

Local crypto companies to lay off staff this year include the Australian owned and operated crypto exchange Swyftx, which laid off 74 workers – about 21 per cent of its headcount – in August, and Melbourne-based crypto outfit Banxa which slashed 70 staff – or 30 per cent of its workforce – in June.

“As you’re all aware, we are operating in an uncertain business environment, with levels of domestic inflation not seen in over two decades, rising interest rates, highly volatile markets across all asset classes, and the potential for a global recession,” Swyftx co-founders Alex Harper and Angus Goldman wrote in a note to employees in August.

“We started growing our team in a very different world and it’s now prudent to make sure our cost base is compatible with this extended period of economic uncertainty.

“We want to be very clear that impacting our teammates in this way is a last resort and is not, in any way, a reflection of the talent or commitment of those individuals. We are parting ways with many incredibly gifted friends and colleagues that will be missed for their ingenuity and passion.”

The cryptocurrency market has fallen by about two-thirds this year, down to about $US1.07 trillion ($1.65tn) globally. (Photo by Ozan KOSE / AFP)

The city found to have the highest number of crypto lay-offs this year was San Francisco, accounting for about 26 per cent of all lay-offs with 1142, while Dubai and New York took second and third place respectively.

The cryptocurrency market has fallen by about two-thirds this year, down to about $US1.07 trillion ($1.65 trillion) globally.

It comes after crypto giant Binance announced an agreement to buy the non-US unit of rival exchange FTX, the company led by crypto billionaire Sam Bankman-Fried, after FTX was hit by billions of withdrawals.

Binance chief executive Changpeng Zhao said in a tweet that FTX had “asked for our help” after “a significant liquidity crunch”.

The move will lead to the merger of the two largest cryptocurrency exchanges globally, and it’s unclear whether any lay-offs will result from the transaction.