Crypto media outlet CoinDesk is laying off 45% of its editorial staff in a sweeping restructuring move as its parent company Digital Currency Group (DCG) seeks to bring on strategic investors, according to an internal memo reviewed by The Block.
The layoffs were announced internally on Monday and will see 20 individuals, or 45% of the editorial team, let go. Overall, this represents a 16% reduction in the workforce for the company. CoinDesk’s CEO, Kevin Worth, described the decision as a “required step to ensure a financially sound business moving forward,” indicating the move is geared toward finalizing a deal to sell CoinDesk Inc.
Legacy publication
Founded in 2013, CoinDesk has become a leading name in the cryptocurrency media landscape.
The layoffs follow news of a nearing $125 million deal led by crypto investor Matthew Roszak of Tally Capital, in which DCG would retain a stake. DCG purchased CoinDesk for $500,000 in 2016 and expanded its offerings into events, data, and indexes.
DCG’s plans for restructuring come at a pivotal moment for the firm, which has been under scrutiny from regulators and has dealt with significant financial challenges. Genesis Capital, a DCG subsidiary, filed for Chapter 11 bankruptcy protection in January, listing liabilities ranging from $1.2 billion to $11 billion.
In addition to the potential sale of CoinDesk, DCG is also looking for new investors for its crypto exchange Luno. Meanwhile, the New York Attorney General’s office is reportedly investigating DCG over its dealings with Genesis Global Capital, another subsidiary, with investigations extending to past chief risk officer Michael Patchen.
These legal pressures compound the challenges facing DCG, but the parent company has expressed confidence in its future. According to DCG’s second-quarter investor letter, CoinDesk saw strong performance this quarter, with $15 million in revenues from the Consensus 2023 festival in April. The letter also outlines the firm’s ongoing efforts to attract new institutional and strategic investors.
The move to downsize staff has left the crypto community in shock, and the laid-off employees will be awaiting details from an all-hands meeting scheduled for 4:00 pm ET on Monday.
While CoinDesk navigates this significant transition, competition within the crypto media space continues to heat up. CoinDesk’s reputation as a reliable news source and industry influencer will likely serve as a vital asset as it seeks to realign its business strategy.
This story is part of an ongoing wave of restructuring and realignment in the crypto industry as regulatory pressures mount and investors seek more stable opportunities. CoinDesk’s restructuring, in this context, may be a sign of further changes to come within the sector as businesses adjust to a rapidly evolving landscape.
(Note: CoinDesk is a competitor of CryptoState.)
