BlockFi, a leading digital asset firm providing various services to both retail and institutional customers, has announced that it will cut 20% of its workforce due to the challenging economic environment. The company is now refocusing its energy on profitability as opposed to just rapid growth.
Earlier today, BlockFi founder and CEO Zac Prince issued a statement on platform operations in light of crypto lending/yield platform Celsius’ apparent “run on the bank” challenge. Prince said they were not experiencing any issues at that time.
As a venture stage firm, the funding environment is grim as investors attempt to glean valuation changes and sort through which firms will make it through the storm. Additionally, some crypto VCs hold cash in crypto – a market that has lost about 60% of its value in recent weeks.
BlockFi said they have been “impacted by the dramatic shift in macroeconomic conditions worldwide creating market conditions that have “had a negative impact” on their growth rate.
BlockFi management explained:
Since Q1 of 2022, the macroeconomic environment has shifted dramatically, sparking a dramatic pull back in equity and crypto markets. As a result, our number one goal has been to achieve profitability so that we can own our destiny as we navigate what many expect to be an extended global recession. We have been eliminating expenses throughout our business such as:
- Reducing marketing spend
- Eliminating non-critical vendors
- Reducing executive compensation
- Slowing headcount growth
Unfortunately, after taking significant time to plan and consider, this is the action we now need to take to achieve our profitability goal.
BlockFi currently reports around 850 employees therefore about 170 individuals will no longer have a job. The company is working to help to find employment for impacted individuals at other crypto firms. BlockFi said it was a “hard day” but they know they will “persevere.”