Swyftx slashes workforce

The exchange commences an internal reorganization process after stating that it has “no exposure to FTX”, but it is not immune to the ensuing market crash.

Exchanges & Wallets December 5
Kimberly Rodriguez Medina

FTX is taking a toll on the crypto world and is viewed as the second great collapse of an ecosystem so far this year following the events of Terra-Luna. The first hit by this domino effect was BlockFi, which recently halted withdrawals, and now it looks like Swyftx is in trouble as well.

Unlike the crypto lender, the cryptocurrency exchange has no direct exposure to Sam Bankman-Fried's exchange, but it does say it is having a hard time weathering this crypto winter. The executive director of Swyftx assures through a press release that the company "will reduce its workforce."

The news comes at a time when layoffs are the order of the day. Coinbase, Meta, and Kraken recently reduced their staff to accommodate market conditions. FTX's crash has been the main cause of the latest collapse of the crypto industry, decreasing the number of trades that are executed on a daily basis.

The fall in the price of cryptocurrencies, coupled with the decrease in operations, entails a lower workload. This has caused both the workforce and the offices to become the natural choice when looking to reduce expenses. Now it is the turn of Swyftx, who will slash nothing more and nothing less than 40% of the staff. "We have to prepare for the worst of falls," adds the CEO, which he expects to arrive in the first quarter of 2023.

Alex Harper, the company's co-CEO, predicts "more black swan events" and wants Swiftx to be ready for "what's next." In Harper's words, the worst is yet to come and next year could see "the worst-case scenario, with the most significant drops in world trade volumes." The exchange wants to take advantage of the fact that it has not been affected by "events like FTX", to "exit the current market in a position of strength".

Despite the reduction, the exchange in question ensures that it had "the largest team of Australian exchanges", that is, despite this measure it can still compete in the market. The company's main competitors have 5 times fewer workers than Swyftx, which means it's still "much bigger" than they need to operate.

"We were genuinely hopeful in August that the revenue modeling we'd done would not require any further reduction in staff numbers, but the FTX situation has forced us to plan for a period of diminished trading activity. In this, we are not alone, with many exchanges now in the process of scaling down their teams", Swyftx.

Kraken, the exchange led by Jesse Powell, claimed that the layoffs from the platform were due to its rapid growth last year. Swyftx claims to have experienced this same situation since the crypto ecosystem was "very different at the beginning of the year." This prompted an exponential growth in the workforce since the global trade volume forecasts that were anticipated were much higher than those that we have seen in reality. Now, the crash of the crypto world has caused the volume to decrease and, consequently, its workforce.

"I fear that only time and Swyftx continuously proving that it is different, every day, will leave FTX behind," says the CEO.

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