Following the termination of the SPAC merger deal, eToro is expected to cut its global workforce by approximately 6%. It has been reported that approximately 100 employees will be laid off, 55 of them in Israel.
eToro is joining other financial companies that reduced their workforce in the past several months. eToro is pursuing an alternative approach, the company is holding negotiations for a private funding round according to recent reports.
It has been estimated that the new funding round will range between $800 million to $1 billion at a $5 billion valuation. In March 2021 when the merge was announced the company's valuation was $10.3 billion.
eToro's Response to the Layoffs
Yoni Assia, eToro CEO and Co-Founder said: "Due to the current market conditions and after a period of accelerated growth we decided to take in the current period a more balanced approach between growth and profitability.
“As a result, we made a difficult decision to cut our workforce in order to ensure long-term sustainable growth.”
We have reached out to eToro for further clarification and received the following:
“In light of current market conditions we have been looking closely at how we manage our costs. After a period of hyper growth, it is now necessary to take a more balanced approach between growth and profitability.
"We have therefore taken the difficult decision to reduce our global headcount by approximately 6% to help ensure our sustainable long term growth. We will provide assistance to the employees leaving us, to support them in their next steps of their career."
“Over the past 15 years eToro has weathered many market cycles, emerging stronger from the experience. Despite the current headwinds, our underlying business remains healthy, our balance sheet is strong and we are confident in our long term growth strategy.”
Another Crypto Exchange Reduced its Workforce
Bullish.com, a crypto exchange for institutional clients that is regulated by the Gibraltar Financial Services Commission laid off less than 30 of its staff. Bullish.com is a subsidiary of block.one that received $10 billion in funding.
While a downturn in the crypto markets seem the main factor in trimming the workforce, many companies are concerned with a potential recession in the United States (which will spill over to other regions).
These are precautionary measures in an event of a global recession that may or may not take place at the beginning of 2023.