An Australian crypto company valued at $3.5 billion is facing a fierce backlash after sacking 17 per cent of its staff from its gaming division, while continuing to “hire aggressively” after raising $280 million in funding in March.
The crypto platform, which is an Australian unicorn called Immutable, could be hit with legal action as the union questioned the validity of the redundancies.
The union called Games Workers Australia has disputed the number of staff members that were fired claiming it was at least 30 roles, while Immutable has insisted just 18 workers were let go.
The staff came from the company’s flagship video game Gods Unchained and were advised of the redundancies 24 to 48 hours before being told to leave.
Staff were fired from roles including video effects artists, senior engineers and a marketing director and the process involved a 30-minute company wide meeting last Monday.
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‘devastating news’
Game Workers Australia, a branch of Professionals Australia, said it is supporting staff from Immutable Games Studio who received the “devastating” news that they would be made redundant.
“Based on information we have received, Game Workers Australia believes there are at least 30, but potentially more, job losses at Immutable,” said Professionals Australia CEO Jill McCabe.
“Immutable has provided varying reasons to their employees as to why the redundancies were necessary.
“While some employees were advised that the reason for their redundancy was due to individual performance metrics, others were advised the cause was due to an organizational restructuring or the non-alignment of their role to business goals.
“While staff were advised that they were able to request information about other roles in the company, their were given the impression that they would not be suitable for these roles.”
However, an Immutable spokesperson said the restructure was a “difficult choice” and was performed to meet business goals, while individual performance was not a reason for any redundancies.
They added individual staff were given the opportunity to respond to the redundancies and most were found unsuitable for redeployment to vacant roles.
Hiring 80 more roles
Concerns have been aired that Immutable is still hiring for similar roles that were made redundant such as product managers and engineers.
An Immutable spokesperson said the restructure impacted 6 per cent of the total number of employees at the company and it continued to “hire aggressively”.
“As we grow, the nature of the expertise the company needs is changing. We needed fewer artists, unity engineers and card designers and are hiring more tokenomics experts, blockchain engineers and crypto product managers,” they said.
“We have established new roles for Gods Unchained which we will be hiring for over the next six months; in total we will be hiring more new roles into Gods Unchained than were made redundant.
“Immutable is growing from 280 employees today to over 360 by the end of the year.”
The company started the year with just 120 employees and has already more than doubled, they added.
Game Workers Australia also claimed that Immutable provided no opportunity for employees to respond to the company’s intention to make them redundant and most of the redundancies were advised and executed within 24 to 48 hours.
“Sadly, the experience of game workers at Immutable is emblematic of the broader problems across Australia’s growing $3 billion games sector,” Ms McCabe said.
“While game workers are highly qualified and skilled, wages are unsustainably low, the hours are long, and unpaid overtime is common.
“Many people burn out of our industry and leave before even making it to five years.”
But the Immutable spokesperson defended its process and said the company “followed a fair and consistent process in relation to the restructure that is in line with legal obligations”.
Earlier this year, Immutable’s founders James, 30, and Robbie Ferguson, 25 were one of 13 new entrants that placed on the Australian Financial Review rich list with an estimated combined wealth of $1.01 billion.
Tech sector bloodbath
Immutable’s staff are the latest casualties in the tech sector, which has seen a spate of companies firing staff as conditions get tougher.
Australian healthcare start-up Eucalptys that provides treatments for obesity, acne and erectile dysfunction fired up to 20 per cent of staff after an investment firm pulled its funding at the last minute.
Debt collection start-up Indebted sacked 40 of its employees just before the end of the financial year, despite its valuation soaring to more than $200 million, with most of the redundancies made across sales and marketing.
Then there was Australian buy now, pay later provider Brighte, that offers money for home improvements and solar power, which let go of 15 per cent of its staff in June, with roles primarily based on corporate and new product development.
Another buy now, pay later provider with offices in Sydney called BizPay made 30 per cent of its redundant workforce blaming market conditions for the huge cut to staffing in May.
Earlier this year, a start-up focused on the solar sector called 5B Solar, which boasts backing from former prime minister Malcolm Turnbull, also sacked 25 per cent of its staff after completing a capital raise that would inject $30 million into the business
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