The crypto winter has been hard for crypto enthusiasts, cryptocurrencies, and crypto exchanges alike – in fact, the overall value of global cryptocurrencies has fallen by almost 70% from an all-time high of about $3 trillion in November to $929 billion this year.
This recession has made the going tougher for crypto players, as Coinbase and Celsius have found out. Coinbase, in fact, had to turn back on its aim to increase its headcount and put a freeze on recruitments. Later on, it announced that it would be extending the freeze on hiring and rescind several offers that had already been made.
Now, it has decided to reduce its global workforce (as of June 10, 2022) by 18% in order to “stay healthy during this economic downturn.”
That’s right, one of the leading crypt exchanges of the world has decided to make nearly 1100 layoffs in order to manage its operating expenses. It seems that the restructuring expenses related to the termination benefits will cost Coinbase up to $45 million.
In a blog post, Coinbase CEO Brian Armstrong said that he has had multiple conversations with his management team over the last month to arrive at this decision.
If you are a Coinbase employee, you will know whether you drew the short straw or not via email. You will receive it from HR in your personal email, since the company has decided to cut access to its systems for affected employees. It has taken this step in order to protect the sensitive customer data it stores, Armstrong said in the blog post.
If you faced the axe, then you will receive an invitation to have a direct conversation with the HRBP and the senior leader of Coinbase. “I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you,” he added.
Not that it has remained healthy and unscathed this year. Its shares have already tumbled by almost 80% in 2022 owing to the sharp decline in crypto prices has hurt transaction volumes. On Tuesday morning, shares of Coinbase rose about 1% in pre-market trading, but dropped by about 3% to remain at $50.40.
The reasons behind such a move are not unknown, especially since many other companies have made mass layoffs at a time when they are struggling to raise funds, investor interest is cooling, and the crypto winter is here to stay.
This also makes Coinbase the latest name in a long list of crypto companies to announce job cuts. On Monday, lending platform BlockFi reduced its headcount by 20% while crypto exchange Crypto.com fired over 400 employees.
Armstrong informed that this decision has been made due to rapidly-changing economic conditions (a recession after a boom of over 10 year, which could lead to another crypto winter and last for a long period of time) and managing costs in down markets, and clocking an accelerated rate of growth (it grew by almost four times in the last 18 months, which led to rising employee costs).