Coinbase lays off 1,100 staff to ‘stay healthy during crypto winter’
Major crypto exchange Coinbase announced it will reduce its staff by 18%, or about 1,100 positions, as part of a restructuring plan. The move aims to par down expenses and increase efficiency ahead of a looming recession.
On June 14, Coinbase submitted ‘a restructuring plan to manage its operating expenses in response to current market conditions and ongoing business prioritization efforts’ to the U.S. Securities and Exchange Commission.
‘The Plan involves a reduction of the Company’s workforce by approximately 1,100 employees, representing approximately 18% of the Company’s global workforce as of June 10, 2022, following which the Company expects to have approximately 5,000 total employees as of the end of its current fiscal quarter on June 30, 2022.’ wrote the company.
The news comes after Coinbase saw a sharp plunge of 7% in its shares. The company is now on track to reach another record low of $48, plunging by a staggering 79% since the start of the year.
CEO and co-founder of Coinbase Brian Armstrong announced that it was a difficult decision in an email to staff on Tuesday. ‘We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period. In past crypto winters, trading revenue (our largest revenue source) has declined significantly. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.’
He explained that managing costs is critical to prepare for the incipient economic recession. Also that the company grew too quickly because it hired too many staff during the bull market.
Coinbase is joining BlockFi, Gemini and other crypto companies in laying off a huge chunk of their employees amid the crypto crash.
On the other hand, Binance, Kraken and Polygon are accelerating hiring in response to industry-wide job slash.