- Coinbase has reduced the size of its workforce by about 18%.
- The firm’s CEO Brian Armstrong explained that the company’s employee costs were too high to manage in such an uncertain market.
- The 18% cut represents 890 team members.
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The largest U.S. crypto exchange is taking drastic measures to ensure its survival.
Coinbase Cuts Staff
Another crypto exchange is downsizing to survive the crypto winter.
Coinbase CEO and co-founder Brian Armstrong informed employees Tuesday morning that the company had made the “difficult decision” to reduce the size of its staff by about 18%. In a note first sent out to employees and later published on the Coinbase blog, Armstrong revealed why the company had chosen to take such drastic measures, citing the current crypto market downturn, fears of a broader, extended recession, and the company’s rapid growth in 2021.
“As we operate in this highly uncertain period in the world, we want to ensure we can successfully navigate a prolonged downturn,” Armstrong wrote, adding that Coinbase’s employee costs were too high to manage in such an uncertain market. He also highlighted the need for the company to increase efficiency by fully integrating existing employees and making several targeted resourcing changes.
According to the note, those affected by the layoffs will receive a minimum of 14 weeks of severance pay, plus an additional two weeks for every year of employment beyond one year, as well as four months of health insurance and access to the company’s Talent Hub.
According to Coinbase’s most recent shareholder letter, the company had 4,948 full-time employees as of March 2022. The 18% cut represents 890 team members.
Coinbase is not the first crypto company to shrink its staff in response to the ailing crypto market. At the beginning of June, the Winklevoss-led exchange Gemini cut 10% of its staff, blaming the crypto industry’s sustained downturn and macroeconomic turmoil. Crypto lending platform BlockFi also recently revealed it had let go of 20% of its workforce, similarly blaming a “dramatic pull back in equity and crypto markets.”
Armstrong noted in his letter that the exchange has weathered four previous crypto bear markets and is well experienced in managing its costs. However, further cost-reducing measures are possible depending on how long the current downturn lasts.
Disclosure: At the time of writing this piece, the author owned ETH and several other cryptocurrencies.