Coinbase is the latest crypto firm to take an axe to its workforce, outlining plans to lay off around 1100 people – 18% of its workforce – as it looks to cut costs in the face of “current market conditions”.
In an SEC filing, the firm says it will reduce its workforce to about 5000 this quarter – by 30 June. The move will cost between $40 million and $45 million in severance and other termination benefits.
Coinbase had already put in place a hiring freeze and rescinded a host of accepted job offers.
In a blog, CEO Brian Armstrong says: “We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period.”
Armstrong also says that Coinbase has grown “too quickly” from its headcount of 1250 at the beginning of 2021 and the firm now neds to manage expenses and increase efficiency.
Stressing that “the buck stops with me,” he concludes: “To our colleagues who are departing, I want to say thank you for giving everything to this company, and that I am sorry.”
The news comes as crypto markets are in freefall. Yesterday, bitcoin crashed to its lowest level since December 2020 after one of the crypto-economy’s largest lenders, Celsius Network, suspended withdrawals on Sunday.
Bitcoin is currently trading at around $22,000, down from an all-time peak of nearly $65,000.
Yesterday, BlockFi said it is cutting about 20% if its staff, while Crypto.com said it will axe five per cent of its workforce. Earlier, Gemini said it would be laying off 10% of its staff.
With the sector in turmoil, JPMorgan has cut its rating on Coinbase and slashed its price target from $171 to just $68.