Tech startups continue to drain staff after a period of high growth. The latest casualty is local digital currency exchange Swyftx, with the company announcing this week that it is “deeply saddened” to say goodbye to 74 “friends and colleagues” in a move that will drastically cut the business from its once 250-strong team.

In a letter written by co-CEOs Alex Harper and Ryan Parsons, the digital currency exchange cited an “uncertain business environment” plagued by rising interest rates and highly volatile markets across all asset classes as the driving force behind the latest round of positive-discounts.

“We’ve started growing our team in a very different world, and now it’s prudent to make sure our cost base is consistent with this extended period of economic uncertainty,” the co-CEOs said.

"We want to be very clear that impacting our teammates in this way is a measure of last resort and is in no way a reflection of the talent or commitment of these individuals."

Just two months earlier the company, which is now being forced to "reflect and reset", announced its intention to merge with share trading and pensions platform Superhero in a move described as "historic".

At the time, Superhero said the merger would create a digital asset and financial services company valued at $1.5 billion and more than 800,000 combined customers.

It also claims the combined business will be "the first in Australia to offer access to both decentralized and traditional finance, supporting trading and investing in cryptocurrencies, shares and superannuation".

The merger is expected to close in early FY23.

Speaking to InvestorDaily, RMIT University Senior Lecturer in Finance Angel Zhong shed light on the recent global trend of technology layoffs.

The culling of Swyftx staff, she noted, is both a reflection of the "crypto winter" and the carnage seen in the tech sector.

“In 2022, despite the global labor shortage, there is a huge wave of layoffs in technology. In the US, layoffs began as early as February. Tesla, Netflix and other tech giants experienced massive layoffs at the beginning of this year,” said Dr. Zhong.

“Over the past three years, tech stocks and cryptocurrencies have definitely been the darlings of the market. Investors were extremely optimistic and injected a significant flow of funds into these areas. This boosts the company's valuations. Tech companies and startups are the ones that have benefited the most.

"Recently, stock markets around the world have been collapsing sharply. Shares in Australia's tech companies are down about 24 percent since the start of this year. Fears of a recession are also growing. With interest rates rising, investors (such venture capital firms) are moving away from risky investments like tech startups,” she continued.

Experts have predicted that the crypto winter could end half of the local crypto exchanges.

However, Swyftx's CEOs are adamant that the business will continue to move forward, adding that "we will not lose focus on building our vision".

Maja Garatsa Djurdjevic

Maya's career in journalism spans more than a decade in finance, business and politics. Now an experienced editor and reporter in all elements of the financial services sector, before joining Momentum Media, Maya reported for several established news outlets in South East Europe, looking at key processes in post-conflict societies.