Coinbase will cut about 18% of employees
U.S. bitcoin exchange Coinbase will cut about 18% of its staff due to the onset of cryptozyma.
Co-founder and CEO Brian Armstrong called it a “difficult decision.”.
“The broader market downturn means we need to be more mindful of costs as we approach a potential recession,” he wrote.
Armstrong noted that the company’s staff has more than quadrupled in the past 18 months. Growing too fast has led to problems coordinating and integrating new team members, making it less efficient.
Affected employees will be notified by personal messages. They will be immediately denied access to confidential customer information.
“I understand that removing access will be sudden and unexpected, and it’s not the experience I wished for you. […] Unfortunately, this was the only practical choice to ensure that no one would make a rash decision that would harm the business or him,” Armstrong explained.
Employees who leave Coinbase will be compensated at the rate of 14 weeks’ salary with bonuses for more than one year of service. Coinbase will also pay for 4 months of health insurance and provide assistance with future employment, including at portfolio companies in the venture capital division.
According to CNBC, Coinbase has about 5,000 full-time employees. The layoffs will affect about 1,100 of them.
Earlier announcements of impending layoffs at their companies were made by Gemini executives, Crypto.com Chris Marszalek, as well as BlockFi co-founders Zach Prince and Flory Marquez.
Binance CEO Changpeng Zhao, on the other hand, said crypto winter is a good time to expand staff.
Ripple CEO Brad Garlinghouse said the firm is facing a downturn in the market with “significant cash balances” that will allow it to hire new employees.
“The market is likely to shrink in the near term. But I and many others Bitcoin ATMs return believe that cryptocurrencies will become an integral part of global financial systems in the future. The quieter the ride, the farther you travel,” he stressed.
According to Garlinghouse, Ripple has survived several bear market cycles in its history and “will do so again.”.
Coinbase shares plunged nearly 6% from their closing price after trading opened. The securities are trading at around $49.
Recall that Coinbase entered the stock market in April 2021 via a direct listing on Nasdaq. The first day of trading closed at $328.28 per share.
Coinbase posted a net loss of $429.7 million for the first quarter of 2022. The figure was almost double analysts’ expectations.
Amid a weak start to the year and a downturn in the cryptocurrency market, the company began to optimize costs.