Galaxy Digital to Cut Up to 20% of Workforce

Galaxy Digital Holdings Ltd., the crypto financial services firm founded by billionaire Michael Novogratz, is exploring eliminating as many as 20% of its workforce against the backdrop of a digital-assets market downturn. This is due to the current market conditions and the need to cut costs.

The plan is still under consideration and could be changed. The final number of employees who will be affected is still unknown, but it is estimated to be between 15% and 20%. Galaxy, a New York-based company, reported 375 employees globally as of the end of the second quarter. This means that as many as 75 positions could be eliminated.

"We are always considering the best team structure and strategy, and we will share future plans when they are finalized," said Galaxy's spokesperson Michael Wursthorn. "Even though our industry is facing some economic challenges, Galaxy is still focused on building for the future and creating value for shareholders."‍

Galaxy's shares have declined 70% this year, in line with many of the most popular cryptocurrencies. Its second-quarter loss more than doubled from a year ago, primarily due to unrealized losses on digital assets and on investments in its trading and principal investments businesses. Novogratz was a backer of Do Kwon's Terraform Labs, the company behind the failed Terra and Luna tokens. In July, Novogratz acknowledged that he was "darn wrong" about the magnitude of the leverage in the system.

The crypto industry has been hit hard by layoffs this year, following the collapse of coin prices and the bankruptcy of hedge fund Three Arrows Capital. Crypto exchange Coinbase Global Inc., brokerage Genesis, and lender BlockFi have all announced job reductions. During the second-quarter earnings call in August, Novogratz said Galaxy has taken some “selective shrinking” of its teams but expects the firm to expand to over 400 people this year.

In an October interview with Bloomberg TV, Novogratz said that he expects the markets to be quite bearish over the next few months, due to inflation and geopolitical risks.

Galaxy will report their third-quarter earnings results on Nov. 9.