Bitcoin Processor BitPay Reduces Staff in Cost-Cutting Effort

UPDATE (25th September 14:5o BST): This article has been updated with comment from BitPay CEO Stephen Pair.

BitPay has reduced the size of its staff in an effort to "reduce costs" and "better align with the pace of growth" in the industry, according to an email sent by CEO Stephen Pair to the firm's employees earlier today.

The confirmation of staff reductions at the troubled bitcoin payments processor follows speculation, rumors and a report by bitcoin news source Qntra that BitPay employees were seen leaving its Atlanta office following layoffs.

Pair's email, entitled "Important Company Announcement" and sent to the entire company, suggests the move may have been taken with little prior notice to employees, as he indicated his belief the day would be "emotional" for those involved. The email was provided to CoinDesk by a source close to the firm.

Sources close to the company suggest upwards of 20 full-time employees and contractors may have been laid off.

The email reads:

"I urge everyone to be professional and considerate and not allow the emotion of the day to get the better of you. It saddens me to have to deliver this news as it has been an honor to get to know each and every one of you and my privilege to work with you. And I know [executive chairman] Tony [Gallippi] feels the same way."

Pair continued the email by suggesting employees affected by the staff reduction would be provided support during their job search, and that they would receive references from the company. Sources suggest some are already meeting with other industry employers.

In statements, Pair sought to emphasize that the company has recently set "new all-time high monthly transaction volumes", a development he suggests positions it for long-term success.

Pair said:

"The road to building a successful company is full of challenges. The global market opportunity for bitcoin payments has billions of dollars in potential, but it won’t happen overnight."

The layoffs come one day after BitPay announced it would shelve its "free and unlimited" introductory offer for new merchants.

As part of the plan, new merchants on its Starter Plan will now pay a 1% fee after the first 30 transactions they process each month. The pricing structure contrasts with rival Coinbase, which charges 0% processing fees on the first $1m its merchant clients transact.

BitPay has so far raised $32.5m through three funding rounds and boasts investors including AME Cloud Ventures, Founders Fund, RRE Ventures and angel investors including Ashton Kutcher, Ben Davenport and Roger Ver.

Stan Higgins contributed reporting.

Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.