Cake Group slashes more jobs despite end of founders’ feud

CAKE Group, the parent firm of Singapore-based crypto platform Bake.io, is preparing for another round of layoffs and a company-wide structuring, according to sources who spoke to Tech in Asia.

While CEO Julian Hosp did not respond to Tech in Asia’s e-mails asking for confirmation, he acknowledged the job cuts in a YouTube video released today, saying that the decision was announced at a company town hall meeting on Aug 16.

“Look, it is what it is, and we are here to make the best out of the situation,” Hosp said. “While we have really done well, we do need to reduce our cost a little bit. There’s no way around this.”

Hosp also acknowledged that the latest layoffs are similar to Cake Group’s decision in November 2023 to trim its headcount by 30 per cent. However, he did not say how many staff would be affected this time.

He added that the move would make the company “very, very sustainable” and that Cake Group was “getting very close to a breakeven moment”.

His video is part of an ongoing 90-day challenge to return the company to profitability after months of conflicts between its co-founders, Hosp and U-Zyn Chua.

Following disagreements over the November 2023 job cuts, Chua – also the company’s former CTO – filed a winding-up application with the Singapore Supreme Court a month later in December.

The application was eventually dismissed by the court in April 2024. Shortly after, Hosp purchased all of Chua’s shares in the company, but the CEO claims that the damage had been done.

“The winding-up application that got dismissed was super, super damaging to the reputation, to our revenue, to the customer base,” Hosp said in a YouTube video released on Aug 15.

Tech in Asia contacted Chua to comment on this story but he declined.

According to Cake Group’s 2021 unaudited financial statement, its revenue reached US$631 million while its net income hit US$134.3 million – an increase of over 400x from the previous year.

But following the crypto winter of 2022, the firm’s annual revenue fell by over 3x with a net profit of just US$35,708, according to its 2023 audited financial statement.

Revenue dropped again in 2023, this time by over 6x to US$30.1 million with a net profit of US$30.5 million, thanks to US$135 million in debt forgiveness. The reason for the debt forgiveness was not listed in Cake Group’s financials.

The company, however, recorded an operating loss of US$26.4 million in 2023, a 10x jump from a year earlier.

While the staff cuts were first announced on Aug 16, specific details about the move were not announced until Aug 19, according to sources inside the company. One source told Tech in Asia that his team still had not received concrete information as at today.

Bake.io was previously known as Cake DeFi before the company rebranded in June 2023. TECH IN ASIA