Coinbase plans to reduce its workforce by almost a fifth, in the latest sign of calm falling into the digital asset market as token prices fall.
The group of listed companies in the United States to reduce its workforce by 1,100 employees occurs when a sharp fall in the cryptocurrency market threatens to deal a severe blow to its revenues that depend on trading volumes.
Bitcoin has lost more than 60 percent of its value since hitting an all-time high of nearly $ 69,000 last November, below $ 21,000 on Tuesday. Other companies, such as rival Coinbase exchange Gemini, Crypto.com and cryptocurrency lending platform BlockFi, have also announced plans in recent weeks to lay off large chunks of their workforce.
Prior to Tuesday’s announcement, Coinbase had also terminated existing job offers, citing rapidly changing market conditions.
Brian Armstrong, CEO of Coinbase, said the group made the decision in an attempt to “stay healthy during this economic downturn.”
The group earned about four-fifths of its retail revenue during the first quarter, which has cooled sharply as cryptocurrency prices fell.
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In Tuesday’s announcement, Armstrong said, “I’m the CEO and the money stops with me.” He acknowledged that Coinbase “grew too fast” in light of last year’s broader upturn in the cryptocurrency market.
“It is a challenge to grow at the right pace given the scale of our growth. While we did our best to do well, in this case I am now clear that we hired in excess,” he said.
Coinbase had already marked a slowdown in hiring in May. The same month, the group revealed a first-quarter net loss of $ 430 million. Coinbase shares have fallen 79 percent so far this year.
In a separate blog post, Armstrong said affected employees will receive a personal email notification as the company had already decided to cut off access to Coinbase systems.
Coinbase expects to incur $ 40 million to $ 45 million in layoff-related restructuring costs, the group said in a regulatory document. Employees who have been fired for the exchange will receive a minimum of 14 weeks of layoffs and certain health benefits.
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