TheCable

Coinbase, one of the biggest cryptocurrency exchanges in the world, says it is laying off 1,100 of its employees in order to “stay healthy during this economic downturn”.

Brian Armstrong, chief executive officer and co-founder of Coinbase, disclosed this decision on Tuesday on its blog site.

Armstrong said the decision to lay off 1,100 workers, representing 18 per cent of his workforce, was due to the economic recession in the crypto world.

He added that it became expedient for the company to reduce expenses.

Since last month, the cryptocurrency market cap has dipped by almost $1 trillion, according to CoinMarketCap.

“Today, I am making the difficult decision to reduce the size of our team by about 18%, to ensure we stay healthy during this economic downturn. I want to walk you through why I am making this decision below, but first, I want to start by taking accountability for how we got here. I am the CEO, and the buck stops with me,” Armstrong said.

“We appear to be entering a recession after a 10-year economic boom. 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.

“Coinbase has survived through four major crypto winters, and we’ve created long-term success by carefully managing our spending through every down period. Down markets are challenging to navigate and require a different mindset. At the beginning of 2021, we had 1,250 employees. 

“Our team has grown very quickly (four times 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. We have now exceeded the limit of how many new employees we can integrate while growing our productivity. For the past few months, adding new employees has made us less efficient, not more.

“If you are affected, you will receive this notification in your personal email because we made the decision to cut access to Coinbase systems for affected employees. I realise that the removal of access will feel sudden and unexpected, and this is not the experience I wanted for you. Given the number of employees who have access to sensitive customer information, it was, unfortunately, the only practical choice to ensure not even a single person made a rash decision that harmed the business or themselves.”

The Coinbase CEO thanked the affected workers for their contributions and offered incentives to support themselves while finding new roles.

“Employees who are departing will receive; a minimum of 14 weeks of severance plus an additional two weeks for every year of employment beyond one year, four months of COBRA health insurance in the US and four months of mental health support globally, and access to talent hubs,” he added.

“To our colleagues who are departing, I want to say, thank you for giving everything to this company, and that I am sorry. I hope that as we grow again we get a chance to hire you back. We would not be where we are today without your hard work and dedication to our mission. I am incredibly grateful for everything you have done to contribute to our success.”