As a result of the disappointing performance of the market, the company that is led by Michael Novogratz is reportedly on the verge of cutting its staff strength by 20%. According to information obtained from sources within the company, the business has not disclosed the precise number of employees it intends to lay off, but the percentage affected is expected to be between 15 and 20%.
In addition, Galaxy Digital has a total of 375 employees on its payroll, which suggests that the actual number may be larger than the percentage that was cited.
Michael Wursthorn, who acts as a spokesperson for the company, claims that Galaxy Digital places a primary emphasis on maintaining an ideal organizational structure and business strategy at all times. "As a consequence of this, it is necessary to do so in order to ensure stability, and the company will reveal its plans as necessary," Wursthorn added.
When compared to the loss of $182.9 million that Galaxy Digital experienced during the same period in 2021, the company's second-quarter loss in August of 2017 was a staggering $554.7 million. In addition, the data show that the company's assets under management (AUM) decreased by 40% from the first quarter but remained the same at $1.7 billion.
Galaxy Digital reported a net loss of $111.7 million for the first quarter of 2022, compared to profits of $858.2 million for the same time period in the previous year. Because of this, its total assets under management (AUM) decreased by 5% to $2.7 billion during the time period under consideration.
The Galaxy Digital Acquisition Plan Has Been Put on Hold
A week following the dismal performance report for the second quarter, the company announced that it would be pausing its planned takeover of BitGo until further notice. In the past, Galaxy Digital had contemplated acquiring the cryptocurrency fund manager in order to facilitate its business expansion. However, as a result of the unimpressive performance of the market, the company decided to abandon its plan.
In addition, the company admitted in an official press release that it has not yet provided the audit financial report for the prior year as stipulated in the initial agreement. This was a requirement of the agreement.
Previous reports stated that the finalization of Galaxy Digital's acquisition of BitGo was anticipated to take place during the previous month. However, as a response to the failed business transaction, BitGo initiated legal action against Galaxy Digital.
After Galaxy Digital backed out of the takeover deal at the eleventh hour, the wronged party is demanding compensation in the amount of one hundred million dollars from Galaxy Digital.
Cryptocurrency exchanges and service providers see the need to reduce the number of employees in their workforces in order to regain control over the declining market fortunes and stabilize operations. As a direct result of the crypto winter, a great number of businesses have filed for bankruptcy, and others are struggling to remain operational.
Despite this, the cryptocurrency market is highly unstable, and the consistent price fluctuations point to yet another trend that is concerning for the nascent industry.
