Crypto start-up founder James Ferguson sacks 11pc of Immutable staff amid tech downturn

The founder of a Sydney start-up most recently valued at $3.5bn says it is now the latest victim of the deepening tech downturn.

Immutable co-founders James and Robbie Ferguson. Picture: Supplied

Australian crypto start-up Immutable is axing 11 per cent of staff – 32 roles – with chief executive James Ferguson blaming market volatility and macroeconomic conditions for the redundancies.

Immutable last year landed a $280m funding at a $3.5bn valuation, in a funding round funding round led by Singaporean state investment firm Temasek and including backing from Chinese tech giant Tencent, Hong Kong-based blockchain game developer Animoca Brands and Korean billionaire Park Hyeon-joo’s Mirae Asset.

But the company, which was also backed by disgraced billionaire Sam Bankman-Fried’s Alameda Research, is now the latest tech outfit to downsize amid what’s becoming a torrid period for the nation’s start-ups.

“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,” Mr Ferguson said in a letter to staff seen by The Australian.

“To those who will be leaving us, I want to be clear that these decisions are in no way a reflection of the contributions you have made to Immutable. We are incredibly grateful for your dedication to our mission – we wouldn’t be where we are today without you and we wish you every future success.”

Immutable, Australia’s largest studio dedicated to NFTs and Web3 games, is working on blockchain-based online games including Guild of Guardians and Gods Unchained, but said it would be offloading some of the work on those games to other studios. The company is also centralising its ‘Platform’ and ‘Studio Product and Engineering’ teams.

An NFT is a blockchain token that represents a unique item. In video games, that includes things like in-game characters, accessories, digital land plots and more.

Aside from deteriorating macroeconomic conditions Immutable has also grappled with an ongoing crypto winter, which was triggered by the bankruptcy of Sam Bankman-Fried’s major crypto exchange FTX in November. Crypto trading levels and the prices of major digital assets like bitcoin and ethereum are down significantly from their peaks.

Immutable was founded by brothers James and Robbie Ferguson and Alex Connolly, and is a subsidiary of their blockchain company ImmutableX.

Affected staff were told they would lose access to the company’s systems, and would be informed of their redundancies via email, with one-on-one meetings to follow. Impacted employees will receive on average 10 weeks’ pay, as well as the ability to keep their laptops and IT equipment. They will also receive accelerated share vesting and three months of counselling and support.

“We will be pausing access to Immutable systems for all potentially impacted employees; however email and calendar access will remain open until your scheduled meeting,” the letter from Mr Ferguson reads.

The cut follows a prior redundancy round at Immutable last July.

“For Immutables whose roles are not impacted by these changes, you will also receive an email from the People team to this effect within the next 30 minutes. If for any reason you have not received any communication by 9:45am, please reach out to your manager,” Mr Ferguson said in the letter.

“To our team that is staying, I know this will be a challenging time as you navigate change and farewell friends and talented colleagues you’ve worked closely with. Understandably, there may be some sadness in light of today’s decisions.

“It is my belief though that these tough choices will strengthen Immutable’s long-term position by protecting road map delivery and ensuring our category leadership.

“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.

“We have ambitious goals; nothing has changed in our commitment to achieving them – and we see 2023 as a pivotal year to do just that.”