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BlockFi offers employee buyouts just a month after cutting staff by 20%

By on July 18, 2022 0

Cryptocurrency lender BlockFi, which just weeks ago finalized a $400 million loan and potential vesting terms with crypto exchange FTX, is offering employee buyouts as a way to reduce discreetly the workforce. This decision comes a month after cutting 20% ​​of its workforce.

A BlockFi employee said Decrypt that the company offers employees 10 weeks of paid vacation and 10 weeks of Continuing Health Insurance (commonly known as COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act) for quitting. The source also said the company assured employees that if they accepted the buyout, they would be eligible for unemployment.

BlockFi confirmed employees were being offered buyouts in a statement emailed to Decrypt.

“BlockFi has launched a voluntary separation program to adapt our organization to the current market environment,” a company spokesperson said. Decrypt. “This is not an action we have taken lightly and we want to ensure that employees have the resources to make the decision that is right for them.”

Since signature of the agreement with Sam Bankman-Fried’s FTX on July 1Prince insisted that all was well at BlockFi.

In fact, last week Prince said he thought BlockFi should not be compared to its former insolvent competitors: the brokerage company Voyager and the lender Celsius. He also said the company raised interest rates in July and teased that they had “exciting things in the pipeline.

The next day he replied to Pantera Capital CEO Dan Morehead on Twitter, which itself responded to a the wall street journal writing stating that decentralized finance “has an existential problem”.

In his blog post, Morehead had referred to BlockFi as “a centralized finance company”. Prince replied to Morehead, ‘They were/are bankrupt or insolvent – we are not’, referring to Celsius and Lehman Brothers, the global financial services firm which collapsed in 2008 due to its reliance on backed securities to defaulted subprime mortgages.

But Prince struck a more conciliatory tone last month when the company announced layoffs.

On June 13, BlockFi cut its workforce by 20%, from 850 employees to around 680, according to a Twitter feed posted by CEO Zac Prince.

Prince went on to say that the company has worked to cut marketing and supplier spend, cut executive compensation and slow its hiring.

“Like many others in tech, we have been impacted by the dramatic change in macroeconomic conditions, which have negatively impacted our rate of growth,” Prince wrote in a Twitter thread. “As a result, our number one goal has been to achieve profitability so that we can expand our runway and control our destiny.”

Now, as Crypto Winter drags on, BlockFi is getting smaller again.

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