Australia’s biggest crypto gaming start-up slashes staff

Australia’s largest crypto gaming start-up is making 11 per cent of its workforce redundant despite banking hundreds of millions of dollars in venture capital funding over the last two years.

Immutable, which banked a $280 million round that valued the crypto gaming company at $3.5 billion in March last year, announced the layoffs internally on Wednesday morning.

In a note to staff from chief executive and co-founder James Ferguson seen by The Sydney Morning Herald and The Age, the company blamed the layoffs on a need to maximise how long its cash reserves will last and put its resources towards the most important projects.

Immutable CEO James Ferguson Credit:Oscar Colman

“An unfortunate consequence of these decisions is that we will be reducing the size of our team
by approximately 11 per cent,” Ferguson wrote. “This is difficult news, and I am sorry to all Immutables impacted by these changes. 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.”

Immutable is the latest in a string of Australian start-ups to cut staff over the last 12 months, following others such as the rapid grocery delivery service Milkrun and social media tool Linktree, as investors become wary of making big bets on nascent companies.

The note said Immutable was making a series of changes to its organisation, including handing over development on the traditional aspects of its games to partners, so it could focus on the crypto and Web3 components, reorganising some of its divisions and shifting spending to core areas.

The crypto industry overall has been battered over the last year as investors concerned about rising interest rates turn away from speculative investments and a series of high-profile collapses, including of the FTX exchange and the Terra/Luna cryptocurrency project.

Immutable, which was founded in 2018 and headquartered in Sydney, had grown rapidly in recent years, offering generous pay packages that other start-up bosses privately complained about how hard it was to compete.

On Wednesday, the company told staff that they would receive an email if they were likely affected by the cuts with further briefings and one-on-one meetings to come.

“We will be pausing access to Immutable systems for all potentially impacted employees; however email and calendar access will remain open until your scheduled meeting,” Ferguson wrote.

“I appreciate that this may feel over-cautious – this was a really challenging decision to make. However, I believe this is the only prudent choice in light of our responsibility to protect sensitive company and customer information, and to ensure access to our systems is secure.”

Ferguson wrote that affected staff would be offered an average of 10 weeks redundancy pay, which is above statutory requirements; an ability to keep more shares in the company than required; laptops; and counselling, coaching and outplacement services. Staff in the US will also have their company-provided healthcare extended.

Ferguson did not back down from the company’s ambitious vision to dominate Web3 gaming.

“It is my belief though that these tough choices will strengthen Immutable’s long-term position by protecting road map delivery and ensuring our category leadership,” he wrote. “We have unwavering conviction in the significant opportunity we are executing against, and we know there is still so much innovation and transformation yet to come for web3 gaming.”

More to come.

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