The crypto roller coaster ride continues to rapidly descend. According to a corporate SEC filing, Coinbase, one of the leading cryptocurrency trading platforms, is laying off 18 percent of its workers, or around 1,100 people. The announcement was also made in a letter to employees penned by CEO Brian Armstrong, which was tweeted out on Tuesday.
The key reasons for the layoffs, according to Armstrong, are the approaching recession, the current crypto crisis, and excessively optimistic growth.
- “As we operate in this highly uncertain period in the world, we want to ensure we can successfully navigate a prolonged downturn. Our team has grown very quickly (>4x in the past 18 months) and our employee costs are too high to effectively manage this uncertain market. The actions we are taking today will allow us to more confidently manage through this period even if it is severely prolonged,” the CEO wrote.
Cryptocurrency has been in free fall for months, with numerous coins hitting new lows. Bitcoin alone lost more than 13 percent yesterday, and ethereum lost more than 17 percent.
Coinbase is just one of many crypto companies that have let off employees this week as a result of the downturn. Staff at BlockFi, Gemini, and Crypto.com have also been laid off, but the layoffs at Coinbase are the largest thus far.
Coinbase had planned to hire additional employees only a few weeks prior. However, due to market conditions, they halted hiring “for the foreseeable future.” They also retracted job offers from persons who had already accepted them but had not yet reached their start dates, in addition to the recruiting freeze.
In a recent shareholder letter, the corporation attempted to assuage investor concerns about a possible bankruptcy. The company’s Q2 shareholder statement stated, “We believe these market conditions are not permanent, and we remain focused on the long-term.” However, around a fifth of the company’s employees are no longer part of the long-term plan. In today’s letter announcing the layoffs, Armstrong wrote, “We made these difficult decisions to ensure our future is bright.”
Employees laid off today will receive a two-week severance package, four months of COBRA health insurance if they live in the United States, and access to Talent Hub, a job-search and networking tool.
