America’s largest cryptocurrency exchange Coinbase became the latest name to cut staff by a record number.
On June 14, Coinbase CEO Brian Armstrong posted a shocking announcement, saying he would cut more than 18% of the company’s staff, equivalent to about 1,100 employees.
Mr. Armstrong gave a number of reasons for the company to come to this “unprecedented” decision, including the negative volatility of the financial and crypto markets and signs of entering a recession, forcing the exchange to incur the need to cut costs, as well as the fact that Coinbase was hiring “too much.”
Since the 1,250 employees mark in January 2021, Coinbase’s headcount has increased by more than fivefold to approximately 6,100 employees as of June 2022. Because it could not meet operating costs, the company decided to cut 18% of its staff, equivalent to 1,100 people, to bring the number of employees back to about 5,000 people.
Affected Coinbase employees will receive a notification from HR in the coming hours, as well as receive unemployment benefits from Coinbase.
At the beginning of June, Coinbase announced it was suspending its recruiting activities and even canceling agreements with previously accepted candidates. This has caused outrage from the crypto community. In its financial statements for Q1/2022, the company announced a loss of $430 million.
Coinbase’s COIN stock price has been steadily plunging over the past few days, ending June 13 at $52 – down 88% from its peak of $430 in April 2021 and a new low. This is an extremely bad achievement for the first crypto company to be listed on a US stock exchange.
In August 2021, Coinbase CFO Alesia Haas announced that $4.4 billion in cash was “on hand” to prepare for the risk of a bad market turn, but it is unclear how much of this money is left when the market is The market has gone down since November of the same year.
The cryptocurrency sector has continuously witnessed major companies/exchanges cutting staff to cope with the “crypto winter”, such as Crypto.com, BlockFi, BitMEX, Bitso, Gemini,…
Meanwhile, the two largest cryptocurrency exchanges in the market today, Binance and FTX, still maintain their recruitment and expansion plans.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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