LUCKNOW (CoinChapter.com) — CoinDesk, the pioneering crypto-focused news outlet established in 2013, has taken a decisive step towards a transformative business transition, with its parent company, Digital Currency Group (DCG), planning to reduce its editorial workforce by 45%.
The announcement of the workforce reduction was disseminated through an internal memo on Monday, with the CoinDesk team convening for an all-hands meeting to address the organizational changes at hand.
The memo, authored by CoinDesk’s CEO Kevin Worth, conveyed the sad news and the rationale behind the difficult decision.
“This was a required step to ensure a financially sound business moving forward and to set us on the path to close the deal to sell CoinDesk Inc,” Worth wrote, underscoring the gravity of the situation.
The layoffs have affected predominantly the media team, resulting in the dismissal of 20 individuals from CoinDesk’s editorial staff. The source familiar with the matter confirmed the 45% reduction in the editorial workforce.
The initiative aims to streamline the company’s operations. It also seeks to align them with the ongoing strategy to seek new avenues of growth through strategic investments.
DCG’s Bold Move
According to The Wall Street Journal reports DCG was on the brink of sealing a deal worth $125 million.
The deal was with a syndicate led by prominent crypto investor Matthew Roszak of Tally Capital. As part of this prospective transaction, DCG would retain a vested interest in CoinDesk, with its varied portfolio spanning events, data analytics, and indexes.
CoinDesk’s history is intertwined with DCG, as the latter acquired the company in 2016 for $500,000. The present workforce reconfiguration underscores DCG’s strategic intent to recalibrate CoinDesk’s positioning within the dynamic cryptocurrency ecosystem.
DCG’s investor letter for the second quarter highlighted the pivotal role of financial advisors. These advisors aid in identifying and attracting new institutional and strategic investors for CoinDesk.
“With positive momentum and feedback from the market, we have held discussions with numerous interested parties over the last few months, and these processes are progressing,” as noted in DCG’s second-quarter investor letter.
One noteworthy driver of CoinDesk’s recent success was the Consensus 2023 festival, held in April. The event contributed a remarkable $15 million in revenues during a single quarter. This demonstrated revenue generation underpins CoinDesk’s stature as a key player in the cryptocurrency news sphere.
Furthermore, DCG, a multifaceted entity within the cryptocurrency realm, is concurrently exploring avenues for investment in its crypto exchange, Luna. This pursuit comes on the heels of Genesis Capital, a DCG subsidiary, grappling with the aftermath of a challenging credit crisis.
Earlier this year, Genesis Capital filed for Chapter 11 bankruptcy protection. The listed liabilities range from $1.2 billion to $11 billion, impacting over 100,000 creditors.