Blockchain.com to cut 25% of Staff After $270M Shortfall to Beleaguered Hedge Fund Three Arrows Capital

Blockchain.com, a cryptocurrency exchange, is cutting 25% of its workforce, citing harsh bear market conditions and the need to absorb financial losses, according to a CoinDesk report. 

The Luxembourg-based company recently revealed they were exposed to beleaguered crypto hedge fund, Three Arrows Capital, and were dealing with a $270 million shortfall. The report noted that the firm’s fundraising efforts will help absorb that financial impact. 

In addition to cutting some 150 employees, Blockchain.com plans to close its Argentina-based offices and cancel expansions in several countries. According to the report, the layoffs will affect Argentina-based employees the most, with 44% of the layoffs coming from there. 26% of the layoffs will happen in the U.S., 16% in the U.K. and the rest taking place in other countries. 

Furthermore, Blockchain.com aims to shrink its institutional lending business, halt mergers and acquisitions, and pause expansions into gaming and the non-fungible token (NFT) space. 

This reduction in staff brings the overall employee base back to January levels. In the last 16 months, Blockchain.com has grown significantly, going from 150 employees to over 600. Now they have to cycle back a little to grow responsibly. 

Executive salaries and CEO compensation have also been reduced to meet financial responsibilities. Severance benefits ranging from four weeks to 12 weeks will be offered to those laid off, depending on their country. 

The decision to decrease their Argentinian staff makes sense for the crypto exchange as they noted their active demand was coming from Europe, the U.S. and Africa, not Latin America. 

This is just the latest company to announce layoffs, with Coinbase, Crypto.com and BlockFi announcing last month they were doing the same. 

Despite the layoffs, the report noted that consumer revenue remains active and strong. 

Author: Tyler Irvin

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