Amber Group reportedly looking to downsize despite raising $300M

Amber Group announced that it raised $300 million on a Series-C funding round on Dec.16. It also revealed plans to lay off up to 400 employees and cancel performance-based bonuses, as reported by Bloomberg News.

Amber Group initially responded to the Bloomberg News article stating the company was “business as usual” following a statement that claimed there had been “certain false allegations against Amber today, our legal counsel will issue an official statement shortly and take potential legal actions.”

The news regarding the latest funding round revealed it to be led by Fenbuhi Capital US. Amber group commented on the round and said it would scale down and increase its focus on core business to provide best-in-class service despite the bear market.

The Series C funding round is the third funding round Amber Group had this year. The company previously raised $3 billion in funding in February 2022 and another $50 million from a private funding round in December 2022.

Downsizing

Singapore- based Amber Group has been affected by the collapse of FTX. However, it said that less than 10% of its capital was on FTX and its daily operations are unaffected.

Amber Group CEO, Michael Wu, said:

“Even before the collapse of FTX, we were preparing for potentially a prolonged crypto winter,”

The company announced canceling performance-based bonuses for 2022 on Dec. 15 due to “slower business growth and market uncertainties,” according to Bloomberg News. Amber is also looking to reduce management salaries to reduce costs.

Amber group started the year with around 1,100 employees. It laid off 400 people and downsized by 36% in September. Now, the company is looking to cut another 40% from its current 700-people team to reduce to at least 400 people. Overall, the company will shrink from 1,100 in January to 400 in December, marking a 63.% downsize during 2022.

Paradigm

In the meantime, Venture Capital firm Paradigm also announced cutting board salaries by 15%, according to a Dec. 14 statement.

Paradigm pointed at the market contagion following the FTX collapse as a reason for the salary cuts and announced the news via its official Twitter account.

The company said that the decision was made to reduce the need for layoffs. According to the announcement, the company reasoned that the salary cuts would impact the organizational momentum less than layoffs would.

The layoffs spread within the crypto sphere in June, one month after the Terra (LUNA) collapse. The first company that chose to downsize was Gemini. Other crypto giants like Coinbase, BlockFi, Crypto.com, and blockchain.com also joined the wave and let go of a portion of their staff.

Crypto Twitter reacted to the layoff announcements by suggesting that boards of these companies should take pay cuts instead of laying people off. So far, such a decision came only from Paradigm, while others preferred to downsize.