Amid the downtrend in the stock market and crypto prices, Coinbase lays off workers. The total number of workers currently at Coinbase is roughly 5,000, which is to be cut by 18%. The layoff at Coinbase will result in a reduction of 1,100 workers.
Brian Armstrong the CEO of Coinbase mentioned that there’s a need to increase efficiency in their company. According to Armstrong, the company advanced “too quickly” in the bull market.
“Our employee costs are too high to effectively manage this uncertain market. While we tried to get this just right, in this case, it is now clear to me that we over-hired,” Armstrong said.
The news to layoff workers came after Coinbase experienced a downward share trend. Coinbase shares have dropped 79% this year and close to 85% from their record high.
The San Francisco-based company experienced a decrease in the number of users and a 27% drop in revenue from last year. Emilie Choi, the President and Chief Operating Officer said this was indeed a “very difficult decision for Coinbase.” She said it “felt like the most prudent thing to do right now.”
How did the workers get notified?
Coinbase workers that were laid off got an email with the relevant information from human resources. Although this was an unfair situation, the employees have access to a talent hub where they are able to find similar jobs in the industry. As well as 14-week severance pay and four months of health insurance via Cobra.
Coinbase is not the only company not hiring employees at the moment. A similar incident occurred with BlockFi, which said they were laying off 20% of their employees.
Is this something that will be reoccurring?
Choi said her intention for the layoff is a “one-time event” , and that the company holds $6 billion on its balance sheet. Coinbase has pushed through many bear markets before. She said, “We will power through any macro-environment, any crypto winter, or anything that’s coming. The reality though, is that we have to adjust when we feel that there’s a very dynamic economic environment in play.”