Coinbase is sending home almost a fifth, that is 18% of full-time jobs, of its workforce amid the collapse in stock and crypto prices. The crypto exchange sent an email to its employees Tuesday morning to inform them about the platform’s status.
Brian Armstrong, CEO of Coinbase, highlighted a possible recession and the need to manage the company’s burn rate, and increase efficiency. He revealed the company grew “too quickly” during a bull market. Armstrong believes the crypto market is entering a recession after a 10+ year economic boom. And it could lead to another crypto winter and is likely to last for an extended period. He shared that the past crypto winters resulted in a significant decline in trading activity. Armstrong acknowledged that it’s difficult to predict the economy or the markets.
The executive said Coinbase always plans for the worst so that it can operate the business in any environment. The crypto exchange had initially paused hiring and also extended the freeze for the foreseeable future. Earlier this year, it had disclosed plans to add 2,000 jobs across product, engineering, and design. Armstrong said Coinbase’s employee costs are too high to effectively manage the uncertain market. He emphasized that the company tried its best to get it right, but now it’s clear that Coinbase had in fact “over-hired”.
Emilie Choi, the president and chief operating officer, said the crypto exchange would also be doubling down on areas like security and compliance. It will reorient employees to near-term revenue drivers. Coinbase’s employees will get access to a talent hub. It will help them find new jobs in the crypto industry.
With BTC’s price at its all-time lowest, Coinbase’s stock is down 79% and 85% from the all-time high. The company’s stock went public through a direct listing in April 2021 when crypto markets boomed and investors tussled for high-growth tech stocks.