Immutable, Australia’s largest crypto gaming startup known for the NFT trading card game Gods Unchained, has disclosed that it will let go 11% of its total workforce, despite having already announced terminations middle of last year.
According to The Sydney Morning Herald, Immutable made the announcement to employees on Wednesday morning. The company had previously raised $280 million from investors in a funding round that valued the crypto gaming company at $3.5 billion in March of last year.
It appears that the company’s June layoff of 20 employees, or around 6% of its personnel, was insufficient to prevent financial difficulties and the necessity to preserve cash flow following the fall of the cryptocurrency market.
Crypto Gaming Firm Immutable: More Cutbacks
The company disclosed the termination internally, citing the need to save cash reserves and focus essential objectives as the cause.
James Ferguson, co-founder and chief executive officer, confirmed the cutbacks in a note, citing the necessity to optimize the duration of the company’s cash reserves and allocate resources to the most critical projects.
“I take full ownership for these actions […] this is difficult news, and I am sorry to all Immutables impacted by these changes.”
The job cuts can be better understood by looking at the company’s financial information for the previous fiscal year, which was filed with the Australian Securities and Investments Commission.
Immutable earned $27 million, but had $83 million in expenses, including around $45 million for personnel, consultants, and freelancers. These figures, which are submitted to meet with legal requirements, may not necessarily provide an accurate depiction of the company.
Organizational Structure Changes
Reportedly, affected employees will learn whether they have been laid off by email. Those who will lose their jobs will receive an average of 10 weeks of redundancy pay, computers, counseling, and outplacement assistance. Healthcare would be provided to the U.S. staff.
In an effort to recoup its financial losses, the company is apparently also modifying its organizational structure.
The changes include the proposed outsourcing of video game creation to alternative partners, allowing Immutable to concentrate on developing competence in Web3 and cryptocurrency technologies. According to the Herald, spending will be redirected to new key sectors.
Immutable is the most recent Australian start-up to lay off employees in the past year, following the likes of the speedy grocery delivery service Milkrun and the social media tool Linktree, as investors become hesitant to place large commitments on young companies.
Given that the cryptocurrency sector has lost over a trillion dollars in value since 2022 and as rising interest rates heighten fears of an economic slowdown, these redundancies in the web3 industry are not unusual.
Last year, numerous crypto companies folded, resulting in several high-profile bankruptcies and even continuing court battles.
-Featured image from GamesHub