Coinbase Layoffs 18% Of Their Workforce After Crypto Crash
Not just money, but even jobs are volatile in the world of cryptos. While it is the appraisal time for employees working in other sectors, 1000s of crypto workers are staring at job losses amid heightened inflation and uncertainties.
Promoted as a lucrative sector to build careers of the future till last year, crypto companies have taken big hits in 2022 because of the market meltdown. Many are now looking at a long crypto winter, hence laying off. The biggest crypto companies announcing layoffs include crypto exchanges like Coinbase, Crypto.com, and crypto lending platform BlockFI.
Coinbase has announced it will lay off 1100 employees as a part of its cost-cutting plan. This announcement comes just a few months after the crypto exchange announced its plan to hire 1000 employees to expand operations in India.
Coinbase has announced to cut its workforce by 18 percent this month. “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,” Coinbase CEO and co-founder Brian Armstrong said in an official blog post on the company’s website.
Explaining the decision to cut its workforce, 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.”
Grew Too Quickly?
Armstrong acknowledged that the company hired too many too soon.
“At the beginning of 2021, we had 1,250 employees. At the time, we were in the early innings of the bull run, and the adoption of crypto products was exploding. There were new use cases enabled by crypto getting traction practically every week. We saw the opportunities but we needed to massively scale our team to be positioned to compete in a broad array of bets. It’s challenging to grow at just the right pace given the scale of our growth (~200% y/y since the beginning of 2021). While we tried our best to get this just right, in this case, it is now clear to me that we over-hired,” Armstrong said.
Meanwhile, Crypto.com has decided to lay off 260 employees, cutting its workforce by 5%.
Lending platform BlockFi has decided to cut its workforce by 20 percent, or around 170 people.
“This morning we announced that after taking significant time to plan and consider, we are reducing our headcount by roughly 20%. This is not a decision we take lightly and is one that brings us great sadness…Today is a painful day for BlockFi but more so for employees who we have to part ways with. We are doing everything in our power to treat all of our impacted colleagues with the empathy and compassion that they deserve,” BlockFI CEO Zac Prince said in a series of tweets.
Recently, crypto exchange Gemini decided to cut 10 percent of its workforce while West Asian crypto exchange Rain Financial said it would cut a dozen of jobs.
Latin American crypto exchange Bits has laid off 80 employees out of its over 700 workers.
In the current downturn, the global crypto market cap has shrunk below $1 trillion, which is nothing but a massive fall considering the crypto market cap had touched $3 trillion in November last year. The rally to the $3 trillion market cap was particularly led by Bitcoin as it reached an all-time-high price above $69,000. Bitcoin is now trading in the $21,000-$22,000 range.