Galaxy Digital Looks At Cutting Jobs By 20%

Galaxy Digital Holdings Ltd. (TSX: GLXY) is said to be considering laying off up to 20% of its workers in the face of a digital-assets market downturn.

This follows after the firm widened its losses in Q2 2022, posting a net comprehensive loss of US$554.7 million. This is a decline from Q1 2022’s net loss of US$111.7 million and Q2 2021’s net income of US$22.1 million.

According to those acquainted with the situation, the proposal under discussion could yet be revised, and the ultimate figure could be in the 15% to 20% area. The firm reported 375 employees worldwide at the end of the quarter, implying that up to 75 jobs could be removed.

“We are always considering optimal team structure and strategy and will share future plans when finalized,” said 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.”

The company attributes the widening losses to net realized and unrealized losses on digital assets, which are US$231.1 million and US$233.4 million, respectively, in the second quarter. Net unrealized loss on investments also contributed to the redder bottomline with a US$258.9 million loss.

Do Kwon’s Terraform Labs, the business behind the unsuccessful Terra and Luna tokens, was backed by Galaxy founder Michale Novogratz. The latter admitted in July that he was “darn incorrect” about the degree of the system’s leverage.

The crypto firm has yet to recover from the crash of digital asset prices. Shares of the company have gone down 74% year-to-date.

Galaxy also saw its assets under management at a mild 3.8% decline in September over the prior month. At the end of Q2 2022, the firm had US$1.7 billion in assets under management, “a 40% decrease against the 56% decrease of total cryptocurrency market capitalization” from the previous quarter.

BMO Capital Markets’ reiterated their outperform rating for the firm but cut their 12-month price target to $14 from $16 after Galaxy has called off the BitGo acquisition as a result of the firm’s inability to provide audited financial statements by the deadline.

Galaxy Digital Holdings Ltd. last traded at $6.25 on the TSX.

Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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