Coinbase to lay off 18% of workforce as crypto winter hits
Coinbase announced Tuesday it will lay off 18% of its workforce in another sign of a worsening crypto downturn that’s shaved off hundreds of millions of the total cryptocurrency market value.
The U.S.’ biggest crypto exchange is following in the footsteps of other cryptocurrency-related businesses that have recently cut staff, including rival exchange Gemini and lender BlockFi, both of which cited the arrival of a crypto winter — a prolonged downturn — as the reason for the layoffs.
In a message he also posted on Medium, Coinbase Chief Executive Brian Armstrong said laid-off employees would be notified via their personal email accounts and immediately lose access to their company email accounts.
“I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you,” he wrote. “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.
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Coinbase had hired aggressively in recent years, with its workforce ballooning by about 1,200 employees this year. The company plans to lay off roughly that amount, ending the current quarter with about 5,000 employees. Until recently, the company didn’t acknowledge the arrival of a crypto winter, even though its shares have been dropping since it went public more than a year ago. They are down nearly 80% year to date, according to Bloomberg data.
Laid-off employees will receive a minimum of 3.5 months of severance, plus two weeks for every year of employment.
The cryptocurrency downturn began soon after Bitcoin hit its all-time-high in November. Earlier this year, the collapse of the TerraUSD stablecoin and related Luna token erased billions of market gains. In the past week, coin prices plunged after crypto lender Celsius Network froze withdrawals amid what many suspect was a bank-run-like event.