Citing the contagion that followed the collapse of FTX and the resulting consequences for affected firms, Paradigm, a crypto derivative platform is now slashing salaries across the board by 15%. This development makes the firm, the latest to react to the sudden collapse of FTX, which has caused a series of cascading negative effects for the industry.
According to a Thursday Twitter post by the company, it chose the pay cut as a better alternative to reducing staff strength – an approach many crypto firms have employed to remain operational in response to the market turbulence.
Furthermore, it said this approach will have a lesser impact on the firm’s momentum and the broader crypto ecosystem compared to layoffs, stressing that it needed to make difficult decisions during these tough times to maintain financial flexibility.
In an earlier tweet from Matt Huang, co-founder and managing partner at Paradigm, the firm has written down to $0 its equity investment in collapsed FTX which represents a fraction of its total assets, after the shocking revelations about Sam Bankman-Fried and his companies.
Just like many other investors, Matt said he regretted his investment in FTX adding also at the time, that the coming months would be tough for the industry.
Crypto Firms Resort to Layoffs to Remain Afloat
During the heat of the prolonged crypto winter that has plagued the industry, several crypto firms have deployed cost-cutting measures including reducing their workforce to maintain a healthy balance sheet.
Just recently California-based fintech firm Plaid laid off 260 members of its team representing 20% of the entire company. In its announcement, the firm said affected employees will get additional four months of pay and six months of healthcare and career support in cash to allow them to transition easily.
Also Koinly, a London-based digital assets firm reduced its workforce by 14% in its attempt to remain as lean as possible as it makes it through the crypto winter which was worsened by FTX’s sudden fall. NFT giant Dapper Labs also let go of 22% of its workforce due to the macroeconomic conditions.
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