In less than six months, the cryptocurrency company, Genesis, has reduced 30% of its workforce through a second wave of layoffs.
As pressure mounts on executives in the crypto business to reduce expenses in the wake of a downturn, Reuters reported the development, citing a source familiar with the situation.
A company representative said, “As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally.”
The Wall Street Journal broke the news of the layoffs as well as Genesis’ potential Chapter 11 bankruptcy filing in the US.
According to the article, which cited sources, the company is collaborating with investment bank Moelis & Co. to assess its possibilities.
The Genesis spokesperson said in an emailed statement; “We continue working with our advisors, in collaboration with [parent company] Digital Currency Group and advisors appointed by various client groups, to evaluate options to preserve client assets and move the business forward.”
After major exchange FTX crashed in September, a number of businesses have been harmed by investors’ declining interest in cryptocurrencies.
The crypto-focused bank Silvergate Capital Corp announced earlier on Thursday that it was reducing employment by 40%, or approximately 200 employees, in an effort to contain costs.
Its stock plummeted more than 42% after it disclosed on Thursday a steep decline in deposits tied to cryptocurrencies for the fourth quarter, as alarmed investors withdrew more than $8 billion in deposits.
Genesis, a New York-based company, also let go of 20% of its workforce in August. According to the source, there are now 145 employees working for the company, down from 260 before the two rounds of layoffs.
Genesis Global Capital, the lending division of the cryptocurrency company, halted customer withdrawals in November due to “unprecedented market dislocation” brought on by the demise of significant crypto exchange FTX.
Genesis said it was working on a solution to the situation at its lending division in a letter to clients on Wednesday, but it will take more time.
The crypto market is under pressure as investors steer clear of riskier assets due to rising interest rates and concerns over an economic slowdown.