Web3 Gaming Startup Immutable Cuts Staff by 11% to Prolong Cash Reserves
The Sydney blockchain gaming firm blamed the layoffs on the need to preserve the company's cash reserves and allocate resources to the most critical projects.
Immutable sheds workforce for the 2nd time after raising $280 million
Blockchain gaming startup Immutable is cutting 11% of its workforce, according to a report by The Sydney Morning Herald (SMH).
In a note to staff seen by The Sydney Morning Herald and The Age, Immutable CEO and co-founder James Ferguson explained that the layoffs were necessary to prolong the company's cash reserves and allocate resources to the most critical projects.
"As CEO, I am deeply aware that these role eliminations will directly impact the lives of many, and I take full ownership for these actions," wrote Ferguson. Impacted staff will be offered an average of 10 weeks' redundancy pay, laptops, counseling, coaching, and outplacement services, with healthcare extended to the staff in the U.S.
Even so, Ferguson reaffirms the company's vision to dominate Web3 gaming, stating that the firm has "unwavering conviction" in this space and that there is "still so much innovation and transformation" to come for crypto gaming.
"It is my belief though that these tough choices will strengthen Immutable's long-term position by protecting roadmap delivery and ensuring our category leadership," said Ferguson. "We have ambitious goals; nothing has changed in our commitment to achieving them – and we see 2023 as a pivotal year to do just that."
Immutable was founded in 2018 and has grown rapidly over the years, offering competitive pay packages that other Web3 startups have struggled to match. However, the extended crypto bear market in 2022 has forced many blockchain companies to reposition their finances. Last July, Immutable reduced its workforce by 6% in less than five months after raising $280 million in a funding round.
According to SMH, the Sydney-based company was valued at $3.5 billion in March 2020. But in the past financial year, it had $83 million in expenses and only earned $27 million. Around $45 million went toward employees, consultants, and freelancers.
An Immutable spokesperson told SMH that the company had $280 million in cash on its balance sheet, giving it more than four years of cash reserves at its current spending rate.