The crypto roller coaster ride continues to plummet downhill fast. Coinbase, one of the largest cryptocurrency exchange platforms, is laying off 18% of its staff, or about 1,100 employees, according to a company SEC filing. The news also came in a letter to staff written by the CEO, Brian Armstrong, and tweeted out on Tuesday.
Armstrong cited looming recession, the ongoing crypto crash, and overly optimistic growth as the primary reasons for the employee cuts.
“As we operate in this highly uncertain period in the world, we want to ensure we can successfully navigate a prolonged downturn. Our team has grown very quickly (>4x in the past 18 months) and our employee costs are too high to effectively manage this uncertain market. The actions we are taking today will allow us to more confidently manage through this period even if it is severely prolonged,” the CEO wrote.
Cryptocurrency has been faltering for months now, with multiple coins, reaching benchmark lows. Yesterday, Bitcoin fell more than 13% alone, and ethereum more than 17%.
Coinbase is just one of the multiple other crypto companies that are feeling the hurt, and have enacted layoffs so far this week. BlockFi, Gemini, and Crypto.com have also let go of staff, but so far the Coinbase layoffs are the largest.
Only a couple of weeks ago, Coinbase had been planning to bring on new hires. But then, they froze hiring “for the foreseeable future” because of the market conditions. On top of the hiring freeze, they also rescinded job offers from people who had already accepted them, but not yet reached their start dates.
The company had also recently tried to calm investor fears about a possible bankruptcy in a shareholder letter. “We believe these market conditions are not permanent and we remain focused on the long-term,” that company’s Q2 shareholder letter read. Though, that long-term now doesn’t include about 1/5 of the company staff. “We made these hard decisions to ensure our future is bright,” wrote Armstrong in today’s letter announcing the layoffs.
The employees let go today will receive a minimum of two weeks severance, 4 months of COBRA health insurance if they’re in the U.S., and access to Talent Hub, an employment and networking service.