After BlockFi, Coinbase cuts workforce by 18% as CEO admits to over-hiring
While it is one of the world’s biggest crypto-exchanges, it would seem that Coinbase is not immune to the market’s downturn either. According to a blog shared by CEO Brian Armstrong, the exchange will be taking the “difficult decision” to slash the workforce by 18%.
Citing “rapidly changing economic conditions” and the “need to control operating costs,” the exec revealed that these steps are important to ensure Coinbase’s health. That’s not all, however. Armstrong also claimed that the exchange didn’t get its scaling targets right. He went on to concede,
“While we tried our best to get this just right, in this case it is now clear to me that we over-hired.”
Worth pointing out, however, that these decisions weren’t taken in a vacuum. In fact, there has been significant build-up to Coinbase’s efforts to “manage expenses” and “increase efficiency.” Less than a month ago, for instance, on the back of the Terra episode, Coinbase had announced a freeze on hirings. At the time, Emilie Choi had argued,
“Given current market conditions, we feel it’s prudent to slow hiring and reassess our head count needs against our highest-priority business goals.”
Bitcoin is diving down the charts and most of the market is following that trajectory. COIN’s stock has tumbled down the ladder too. In fact, according to a recent report by CNBC, $COIN is down by 76% YTD. Furthermore, first quarter earnings in May revealed that revenue was down 27%.
Worth pointing out, however, that Coinbase isn’t an anomaly. It isn’t the only entity affected by the market downturn. BlockFi is cutting its headcount by 20%. Crypto.com is laying off 5% of its workforce. Gemini Trust and Rain Financial are letting go of undisclosed numbers as well.
With many like CEO Armstrong expecting the dawn of a new recession, this might just get worse for everyone.