‘Preparing for a worst-case scenario’: Aussie crypto exchange Swyftx cuts 35% of its staff

Brisbane crypto exchange Swyftx has confirmed it’s laying off 90 people, which represents about 35 per cent of its staff.

This comes amid a downturn in trading volumes on a platform that, like the rest of the crypto industry and market, is feeling the pinch after the implosion of the global exchange FTX. The ongoing effects of that “black swan” event are far reaching, even for companies with no direct FTX exposure.

According to various reports, Swyftx co-founder Alex Harper made an announcement to staff on Monday morning that detailed some reasons for the cuts.

“We’re saying goodbye to 90 talented friends and colleagues,” said Harper, who noted that while Swyftx had no direct exposure to FTX, it was “not immune to the fallout it has caused in the crypto markets”.

Harper added that the exchange was preparing for the potential of “further significant drops in global trade volumes” early next year and “the potential for more black swan-type events”.

These lay-offs, which are reportedly largely set to occur within the firm’s research and development department, follow an earlier round of 74 redundancies that Swyftx made in August.

They also follow cuts made by fellow Australian crypto exchange CoinJar, which laid off 20% of its staff last week.

Australian exchanges announcing more layoffs.

Everyone preparing for even worse conditions.

Trading volumes hitting new lows.

Tough time for everyone involved.

— Ben Simpson (@bensimpsonau) December 5, 2022

An ‘association fallacy’ with FTX’s ‘casual indifference’

Swyftx’s Head of Communications and Public Relations Tom Matthews shared some emails with Stockhead this afternoon, which detailed a few further takes on the exchange’s staff-cutting decision – and these can be attributed to the exchange more broadly.

The rationale centres around the exchange’s “expectation of a potentially sharp fall in global trade volumes in the first half of 2023 and further aftershocks from FTX’s collapse”.

Further, the exchange notes that “prudently managing the business” remains its priority for next year, while pointing out that it remains one of the two largest exchange teams in Australia, despite the staff reduction.

“There’s a lot of disappointment and frustration among our team that FTX’s casual indifference to its customers has created an association fallacy with Australian exchanges,” continued the Swyftx statement shared with us.

 “We’ve seen evidence that Aussies are repatriating to local exchanges like Swyftx in the wake of FTX. But the reality is that every exchange in the world right now is preparing for a continued slowdown in the trading environment next year.”

Preparing for a ‘worst-case scenario’

In our email exchange, Matthews expressed his sadness regarding the upheaval of a “genuinely lovely team”. He also revealed that Swyftx’s in-house analysts are preparing for a “worst-case scenario of a slowdown in global trade volumes of anything between 30-50% in Q1 next year”.

Swyftx made a large and prominent acquisition/merger deal with the share-trading superannuation startup Superhero back in June, and regarding that venture, Matthews simply confirmed that there is “no change there”.

The Swyftx comms head did also note, however, that “the regulatory and policy environment is far less certain than either Swyftx or Superhero anticipated when the merger was announced.

“Our priority at the moment is to navigate it in a fashion that policy makers are comfortable with,” Matthews concluded.