Coinbase – one of the largest and most popular cryptocurrency exchanges in the world – has announced it’s planning to lay off about 18 percent of its staff. This comes to about 1,100 people.
Coinbase Isn’t Doing So Hot
The crypto space is doing rather poorly as of late. Bitcoin, for example, recently crashed to a new low of about $22,000 per unit, the lowest it’s been since late 2020. The asset – which was trading for about $68,000 in mid-November of last year – has lost close to two thirds of its value in just eight months. It’s a sad and ugly sight, and it doesn’t look like the crypto space has bottomed out yet.
Not long ago, Coinbase announced it was simply planning a “hiring freeze.” The company had stated in the past that 2022 was going to be the year in which it expands to great heights and that it was looking to grow its workforce by three times what it was at the end of 2021. However, this all came to a pause after the crypto space arguably began showing signs of heavy suffering and entering a “winter phase,” in which all prices were trapped in the doldrums and prospects looked bleak and thin.
Still, the company had officially stated in a press release at that time that it wasn’t looking to lay off any employees – a huge difference from companies like Gemini in New York, which said it would be laying off about ten percent of its overall workforce.
Apparently, however, this was all before the price of bitcoin shed another $7,000 practically overnight just a few weeks ago. Up until that point, Coinbase was planning to put a damper on its hiring plans, but everyone was likely to keep their jobs. Now, it doesn’t look like this will remain in play.
By the end of June, the company was believed to be comprised of only 5,000 employees. In a statement, the CEO of Coinbase Brian Armstrong said:
We appear to be entering a recession after a ten+ year economic boom. A recession could lead to another crypto winter and could last for an extended period.
Coinbase acknowledged it has not made things easy for itself given how fast its measures were when it came to growing its overall infrastructure. The company only had about 1,250 employees at the end of 2021, though it has since expanded about 200 percent in just the last seven months alone.
So Many Companies Are Losing Out
The layoffs are expected to cause Coinbase to experience as much as $45 million in restructuring expenses. Another crypto firm – Block Fi – also stated it’s looking to lay off about 170 employees. CEO Zac Prince said:
Like many others in tech, we’ve been impacted by the dramatic shift in macroeconomic conditions, which have had a negative impact on our growth rate.