Crypto Lender Amber Scraps Bonuses, Cuts Jobs as FTX Collapse Turmoil Continues
Since June, Amber has kicked off a series of cost-cutting measures including redundancies and wage reductions.
(Bloomberg) -- Amber Group, one of Asia’s biggest trading and lending platforms for digital currencies, has canceled this year’s staff bonuses as the one-time industry darling grapples with the crypto downturn.
The Singapore-based outfit told employees this week that it is scrapping performance-based bonuses for 2022 due to slower business growth and market uncertainties, in an internal memo viewed by Bloomberg News.
Since June, Amber has kicked off a series of cost-cutting measures including redundancies and wage reductions. Some of its management team have voluntarily agreed to give up all or part of their salaries until the market shows clear signs of recovery.
Amber Chief Executive Officer Michael Wu confirmed the cancellation of bonuses and management salary reductions in an interview with Bloomberg, adding that the firm will continue to reduce costs.
“Even before the collapse of FTX, we were preparing for potentially a prolonged crypto winter,” he said. The company is cutting costs and “there will unfortunately not be bonuses this year.”
The company, whose backers include Temasek Holdings Pte and Sequoia China, plans to slash its workforce to fewer than 400 from a peak of some 1,100 earlier this year, Bloomberg reported last week. It has paused a $100 million funding round and is terminating a sponsorship contract with Chelsea FC, which was part of a sports-deal frenzy among crypto high-flyers in recent years.
With the collapse of Sam Bankman-Fried’s FTX crypto exchange sending shockwaves through the industry, investors and researchers alike have zeroed in on the financial health of Amber. The company was started about five years ago by a group of former finance professionals, including Goldman Sachs Group Inc. and Morgan Stanley alumni.
Amber has said less than 10% of its trading capital was stuck on FTX and executives have sought to reassure the public that the company’s daily operations have not been disrupted.
At its peak, Amber hired hundreds of staff in roles like coding, operations and product management in mainland China, according to two ex-employees who were recently made redundant and asked not to be identified for fear of damaging their future job prospects. They signed contracts with mainland entities that are not directly linked to Amber’s main Singapore-based entity, they said. During the layoffs, these workers were asked to pack up their offices in Shenzhen and work from home, the former employees said.
Amber says it doesn’t have any offices in China. While crypto trading is illegal in China, the ban is not fully enforced, leaving a gray area in which some firms with Chinese origins operate.
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