By Michael Scott
Amber Group announced downsizing its staff by 40%, ending Chelsea FC sponsorship and terminating retail operations, citing FTX fallout. The announcement by Amber Group adds Asia’s leading platform for crypto trading and lending to the list of companies downsizing their staff.
Reasons for Reducing Headcount
Amber Group acknowledged the prevailing crypto market slowdown has made cost-cutting strategies inevitable. Amber regrets the retrenchment wave witnessed in the digital asset since the FTX fallout. Amber Group attributed the fallout to the complete failure of FTX to comply with corporate controls.
The announcement confirming Amber was reducing its headcount is considered necessary for the Singaporean crypto firm to survive the bearish market conditions. The crypto firm revealed consulting with its backers Sequoia China and Temasek Holdings Pte on the headcount reduction from 700 to 400. Amber’s decision signals the diminished outlook that crypto firms have for the virtual asset sector following the spectacular decline of Sam Bankman-Fried’s empire plunged into bankruptcy.
Remote Working
After terminating retail operations, Amber Group promised to reorganize its business model to target large institutions, wealthy clients, and family offices. Amber admitted its customers would decline from hundreds of thousands to a few hundred after exiting the retail sector.
Amber top executive, dismissed speculation that the crypto firms will replicate FTX’s downfall. The firm reiterated its going concern in business despite the blowups witnessed in the crypto space.
Amber announced swapping centralized office locations for remote working. The statement revealed plans to relocate to cheaper offices within Hong Kong. The company confirmed closing regional offices, and affected staff members asked to work from their homes.
Terminating Chelsea Sponsorship
The statement indicated Amber Group initiated a legal process to terminate the $25 million annual sponsorship to London-based Chelsea FC. The deal signed in May required Chelsea to display the WhaleFin logo on the jersey’s sleeves in the current 2022-23 season.
Terminating the Chelsea FC sponsorship alongside the 40% job cuts has prompted speculations of Amber facing a liquidity crunch.
Amber’s cost–cutting measures comes after the news of the sudden loss of its co-founder in 2018, Tiantian Kullander. The unexpected passing of Kullander has hit the company’s operations at a time when it battles exposure to the contagion caused by the FTX fallout.
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