Coinbase to Let 1,100 Employees Go As Market Keeps Falling

investopedia.com:

Coinbase CEO Brian Armstrong announcedtoday that the exchange was laying off 1,100 employees immediately. This reduces the company’s workforce by 18% not long after reaching more than 2,500.

Coinbase is one of the largest cryptocurrency exchanges and one of the few registered to operate in the U.S. The company has seen exponential growth in the last few years, following the phenomenal growth of the cryptocurrency industry.

On June 14, 2021, CEO Brian Armstrong announced in a company blog post and notifications to affected employees that the exchange had to lay off 18% of its workforce due to economic circumstances, overhiring, and managing costs during a downturn in the market.

Indicating a recession is on the horizon, Armstrong said, “A recession could lead to another crypto winter, and could last for an extended period. In past crypto winters, trading revenue (our largest revenue source) has declined significantly. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”

“Coinbase has survived through four major crypto winters, and we’ve created long term success by carefully managing our spending through every down period,” he added. 

Additionally, he believes the company grew too fast over the last year, as it experienced more than 200% growth. Armstrong admits the company may have gotten ahead of itself while trying to keep up with the opportunities that have presented themselves over the last year.

The company is giving affected employees 14 weeks of severance pay, health insurance, and placement assistance.

Crypto companies are worried about liquidity and solvency. Crypto.comand BlockFiannounced on June 13, 2022, that they were