Cake Group cuts staff by 30% amid rift between co-founders

Cake Group, the parent firm of Singapore-based crypto investment platform Bake.io, has cut its staff by 30%, the company confirmed to Tech in Asia. Employees were notified about the move today.

“In order to refocus Cake Group on its core business of Bake, we have taken the difficult decision to restructure our verticals and resize our team to approximately 122 team members,” said CEO and co-founder Julian Hosp in an email to employees.

CTO U-Zyn Chua (center) stands next to CEO Julian Hosp (third from right) in a photo released earlier this year. / Photo credit: Bake.io

Bake, the retail arm of Cake Group, changed its name from Cake DeFi in June.

Cake Group said that 53 employees were cut, impacting teams in both the Singapore and Kuala Lumpur offices. Hosp, co-founder and CTO U-Zyn Chua, and the rest of the executive team will remain in their current positions.

Founders’ rift

Insiders tell Tech in Asia that a rift between Chua and Hosp has been growing due to fights over closing down departments that were not generating revenue.

When contacted, Chua confirmed that he was opposed to the layoffs, adding that Hosp had kept him out of the loop and unilaterally carried out the cuts. He said that the move had “no clear intention” and “would affect the company’s roadmap going forward.”

In an email addressed to senior executives in the company and seen by Tech in Asia, Chua wrote that “carrying out retrenchment exercises in 2023 is clearly in violation of the board’s decision. Carrying it out without the board’s approval will be challenged legally or otherwise, and I reserve my full rights in that regard.”

He added that the board had unanimously voted for the 2023 budget to remain as is.

In a second email seen by Tech in Asia, Hosp responded by saying that the retrenchment plan was not subject to board approval and was a decision that belonged to the CEO.

He added that the 2024 budget, which had significantly reduced personnel costs, was also approved by the entire board.

“Cutting out salary costs by 50% is the only way for us to preserve shareholder value and align with the budget from next year onward,” he wrote.

The decision to cut jobs was announced internally on November 1, according to another email sent by Hosp and seen by Tech in Asia. He said the startup had done an exercise a few weeks earlier to prepare management for the possibility of layoffs.

Insiders say that the job cuts follow the delayed launch of Nova, an update to the Bake app. The new software was rolled back after issues surfaced during beta testing, with Hosp acknowledging the issue in a tweet.

Operating costs and crypto winter blamed

Moving forward