- What – The blockchain firm Immutable is the latest in the industry to dismiss some employees.
- Why – The negative events within the crypto industry last year affected the overall market conditions negatively.
- What next – The gaming company says its action is to prolong its cash reserve.
As a result, several crypto-related companies reduced their workforce to reposition for survival. But the strategy has rolled over to the beginning of 2023 as more firms continue to reduce their staff strength.
Organizational Restructuring Reduces Workforce
Recently, Sydney Morning Herald reported that the biggest Australian gaming firm, Immutable, is laying off some employees.
According to the report, Immutable is cutting its workforce by 11% through this recent exercise. This is the second time the gaming start-up dropped employees after the previous one in July 2022.
The report revealed that the co-founder and CEO of Immutable, James Ferguson, sent a note to employees announcing the reduction exercise. The CEO expressed deep concerns about the news as it would impact the lives of some staff and promised to take full responsibility.
Ferguson explained that the firm is embarking on staff reduction as a necessary step to extend its operations. He mentioned that action would help prolong the company’s cash reserve while utilizing available resources to implement major projects.
Further, the CEO stated that the firm is restructuring for better productivity. He cited that the plan will involve contracting some basic aspects of its game development to some partners. According to Ferguson, this strategy will help the company focus more on its crypto and Web3 components.
Notably, the CEO promised the affected staff a redundancy payment for 10 weeks. Also, they will get laptops and more shares of the firm. Further, Immutable granted the company healthcare services to US-based workers.
Immutable Expenses Outweigh Income
Immutable, as an Australian-based firm, is under the regulation of the Australian Securities and Investments Commission (ASIC). So, the gaming firm must submit its operational details to the regulator in compliance with the regulatory rules.
According to the SMH report, Immutable’s financial record for 2022 lodged with ASIC indicated that the firm’s income was $27 million. However, its expenses amounted to $83 million, of which $45 million was allocated to staff, freelancers, and consultants. These balances placed the company with a huge loss of about $56 million, a reasonable explanation for its staff reduction exercise.
Through its budgeting process, Immutable raised the value of its crypto and token holdings from $500 million to $556 million. However, such a value is uncertain, mostly when the sales of assets are in bulk.
Notably, an Immutable spokesperson disclosed that the firm has about $280 million worth of assets as a long-term holder on its balance sheet. This cash balance provides over four years of cash reserves for the firm following its current budget.
Also, the firm plans to concentrate on more essential sectors of operation as it adjusted its contractor budgets by reducing hiring plans for some months.
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