Tech startups continue to haemorrhage staff following a period of high growth. The latest casualty is local digital currency exchange Swyftx, with the company announcing this week that it is “deeply saddened” to say goodbye to 74 “friends and colleagues” in a move that will drastically trim the business from the once 250 strong team.
In a letter penned by co-CEOs Alex Harper and Ryan Parsons, the digital currency exchange cited an “uncertain business environment”, plagued by rising interest rates and highly volatile markets across all asset classes, as the driving force behind its latest round of lay-offs.
“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,” the co-CEOs said.
“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.”
Just two months earlier, the company that is now being forced to “reflect and reset”, announced its intention to merge with share trading and superannuation platform Superhero in a move labelled as “historic”.
At the time, Superhero said that the merger would create a $1.5 billion digital asset and financial services company and over 800,000 combined customers.
It also claimed that the merged business would be the “first in Australia to offer access to both decentralised and traditional finance, supporting trading and investing across cryptocurrencies, equities and superannuation”.
The merger is expected to be completed in early FY23.
Speaking to InvestorDaily, RMIT University senior finance lecturer Angel Zhong shed light on the recent global trend of tech lay-offs.
Swyftx’s staff culling, she noted, is both a reflection of a “crypto winter” and the carnage seen in the tech sector.
“In 2022, despite labour shortages around the world, there is a massive wave of tech lay-offs. In the US, lay-offs started as early as February. Tesla, Netflix and other tech giants all experienced mass redundancies early this year,” Dr Zhong said.
“Over the past three years, tech stocks and cryptos are definitely market darlings. Investors were extremely optimistic and injected substantial flow of funds into these areas. This increases company valuations. Tech companies and start-ups are those that have benefited the most.
“Recently, stock markets around the world are plummeting. Tech stocks in Australia have fallen around 24 per cent compared to the start of this year. There are also growing fears of a recession. With rising interest rates, investors (such venture capitalist companies) are ditching risky investments like tech start-ups,” she continued.
Experts have predicted that the crypto winter could spell the end to half of local crypto exchanges.
Swyftx's CEOs are, however, adamant that the business will continue to move forward, adding that "we will not lose focus on building towards our vision".
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.