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Australia: Banxa freezes contracts of upto 40% of its employees

Banxa
TL;DR Breakdown
  • Banxa has suspended contracts of up to 40% of its staff.
  • The company CEO was remorseful about the decision, but they couldn’t do anything about it.

Banxa, an Australian crypto exchange gateway, has cut its employee count by 40%. The exchange enables users to change traditional money into digital ones and vice versa.

Back in January, the common shares of Banxa received the ticker symbol for trading when they were first listed on the Toronto Stock Exchange. The listing led to a tremendous surge of more than 90 percent. However, the stock has since dropped by more than 70 percent due to the slump in the crypto market.

The Australian firm announced in May that it had a revenue gain that was 99 percent more than the previous year. In addition, the firm established new legal entities in the United States and Turkey. The number of people working for Banxa reached a total of 250 during the course of the previous year. However, the company’s CEO, Holger Arians, has now conceded that the business made too many hires.

Banxa moves to cut costs of operation

According to the chief executive, the “painful measures” were necessary to overcome the collapse in the crypto market. The firm had lately begun implementing cost-cutting measures. The measures included the termination of all internal events such as galas by the end of May.

Besides, the firm held an “All hands” session on Wednesday morning. In the meeting, CEO Holger Arians claimed the organization developed too fast in light of worsening market conditions. As a result, he made it clear that a reorganization plan involving massive redundancies must occur.

As part of this plan, the number of employees working for Banxa will go down to 160. Besides, Banxa will merge most of the firm’s operations in the markets of Australia and the Philippines. Also, the company’s European managing director, Jan Lorenc, will leave the firm. Lorenc was responsible for guiding Banxa’s expansion efforts into new European markets.

A representative for Banxa stated that the firm would now be smaller and more focused. Moreover, it would be able to focus on higher margins and profitability in the face of the current headwinds in the market.

The firm’s spokesperson made the following comment. 

Banxa’s broad payment channels and compliance system is becoming valuable to artists and networks in web2 and web3. The firm is also a seasoned firm that has been through most ecosystem cycles.

Banxa spokesperson

The entity’s financial records are open to the public, and the firm’s book of account is solid. The layoffs at Banxa are an example of a tsunami of foreign job losses hitting Australian shores. Crypto and technology start-up sectors are the most affected.

Painful adjustments

In an email sent to colleagues, Mr. Arians stated that Banxa’s leadership team was “solemn” about the news of job losses. He warned that if Banxa did not immediately take “decisive moves” to cut costs, then their firm would not be able to excel over the long term.

A portion of the mail read that even though Banxa have made lots of adjustments to their plan. The amount of money they spend on their employees is still too high to operate with the organizational setup they had.

The firm wanted to make more incremental changes to the company. But, macro reasons accelerated their timescale, which prevented that from happening. This added pressure on the leaders at Banxa to make the necessary amendments to the organization’s cost structure.

Mr. Arians believes the firm’s leaders still have faith in their organization’s potential. They aim to become a key infrastructure player in the web3 ecosystem. For the last 18 months, Banxa has enjoyed a trajectory of growth. However, the CEO admitted that the quick deterioration of crypto markets hit the firm.

The team worked hard to manage enormous trading volumes. Besides, they invested in new goods and new markets so that they could offer better services. However, due to the economic slowdown, they have to cut expenses immediately. As a result of the decline in the price of cryptos, most crypto firms opted to end contracts of employees.

Nellius Irene

Nellius Irene

Nellius Irene is a cryptocurrency investor and journalist who has been in the nascent space since 2018. She has researched and written on several crypto-related topics including non-fungible tokens (NFTs), decentralized finance (DeFi), fundraising, mining, etc. Her major focus is covering regulatory events that are capable of shaping the entire crypto ecosystem.

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