Galaxy Digital Holdings Ltd., the crypto financial services
firm founded by billionaire Michael Novogratz, is exploring
eliminating as much as 20% of its workforce against the
backdrop of a digital-assets market downturn. The plan under
consideration could still be changed and the final number
could be in a range of 15% to 20%, according to people
familiar with the matter. New York-based Galaxy reported 375
employees globally as of the end of the second quarter, which
would mean as many as 75 positions could be eliminated. “We
are always considering optimal team structure and strategy and
will share future plans when finalized,” said Galaxy’s
spokesperson Michael Wursthorn. “While our industry continues
to face macroeconomic headwinds, Galaxy remains focused on
building for the future state of institutional adoption, and
on enhancing long-term shareholder value.” Galaxy’s shares
have tumbled 70% this year, inline 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 seen widespread 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 a October interview
with Bloomberg TV, Novogratz said he expects “a rough few
months of markets that are pricing in tremendous amount of
bearishness” due to inflation and geopolitical risks. Galaxy
is due to report third-quarter earnings result on Nov. 9.