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Banxa, a crypto payments operator, announced that it would lay off 30% of its staff to reduce operating costs amid the ongoing bear market.
"Banxa must take decisive actions to reduce costs now, or else our company won't be able to succeed over the long run," wrote Holger Arians, Banxa's CEO, in a letter to employees as reported by The Australian Financial Review.
The Australian firm is a global on-and-off ramp solution, facilitating conversions between digital assets (including cryptocurrencies and ) and fiat currencies.
"Like many others in our industry [we] are anticipating another crypto winter, with trading volumes declining significantly," said the CEO. "We saw Banxa's market capitalization nearly halve in a matter of days, and the forecast is that these conditions will most likely continue for another 12 months."
Banxa's European Managing Director Jan Lorenc is also set to leave the company, indicating its diminishing interest in the European market.
According to data from LinkedIn, Banxa has employees across seven different countries, including Australia, Lithuania, the Netherlands, the Philippines, the United States, the United Kingdom, and Canada. Specifically, Banxa will reportedly drop its staff from 230 employees to 160.
Decrypt has contacted Banxa about the recent layoff.
Falling revenues fuel crypto layoffs
Most crypto platforms make revenue from trading fees directly associated with their trading volume.
Due to reduced trading volumes of late, however, these revenues have dried up significantly.
The 24-hour trading volume of cryptocurrencies across all crypto exchanges was $50 billion yesterday, down 60% from its peak of $124.5 billion recorded on November 11, 2021, according to data from CoinMarketCap.
"Our team has grown very quickly (>4x in the past 18 months) and our employee costs are too high to effectively manage this uncertain market," wrote Brian Armstrong, CEO of Coinbase.
Today, is trading at around $21,400, down 68% from the all-time high of $68,789 it set in November 2021.
The total market capitalization of all cryptocurrencies has now slipped below $1 trillion, down from $3 trillion in November.