Coinbase is laying off 18 % of its workforce, or over 1,100 employees, according to CEO and co-founder Brian Armstrong in a blog post published Tuesday. Armstrong’s news comes just days after Crypto.com CEO Kris Marszalek said that his cryptocurrency exchange will lay off 5% of its corporate workforce, or around 260 people.
Workers affected by the layoffs will be contacted via personal email since the business decided to “limit access to Coinbase systems for affected employees.”
“Given the number of employees who have access to sensitive client information, it was, unfortunately, the only viable choice,” Armstrong explained.
Armstrong stated that, in addition to the uncertainty of the economy, Coinbase’s aggressive recruiting last year led to the necessity to reduce employees.
“Our team has grown very quickly… and our labor costs are too expensive to manage this uncertain market effectively,” Armstrong explained. “The efforts we are doing now will help us to manage this phase more confidently, even if it is significantly prolonged.”
He said that hiring more personnel had reduced the company’s efficiency, not increased it. “We think that the focused resource modifications we are implementing today will enable our business to become more efficient,” he added.
Only a few days ago, Crypto.com’s Marszalek made a similar announcement.
“Our approach is to remain focused on executing against our roadmap while optimising for profitability,” Marszalek wrote in a series of tweets on Saturday. “That includes making difficult and essential decisions to achieve long-term ongoing and sustainable growth by reducing our corporate staff by about 260 people, or 5%.”
Crypto.com, a Singapore-based exchange, reportedly paid $700 million in November for the name rights to Los Angeles’ former Staples Center. It has also spent heavily on advertising, including a prominent campaign starring actor Matt Damon.
The layoffs are the latest symptom of an economic slowdown fueled by high prices, supply chain issues, and Russia’s protracted war against Ukraine.
On Monday, Bitcoin, the world’s largest cryptocurrency, fell to its lowest level since 2020. This comes after the collapse of the stablecoin TerraUSD in May. Its downfall resulted in a $200 billion loss in the bitcoin market in a single day.
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