July 4, 2022

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Crypto exchange Coinbase to lay off 18% of employees

Crypto exchange Coinbase to lay off 18% of employees

Cryptocurrency exchange

Coinbase Global a company

Currency 0.25%

She said she will cut nearly a fifth of her staff because the company has grown too fast and that a possible recession “could lead to a new crypto winter.”

The company said Tuesday it will cut its workforce by 1,100 employees, or about 18% of its staff, as part of its efforts to manage operating expenses. in A letter to all employeesCEO Brian Armstrong said, “Our staff costs are too high to effectively manage this non-ionizing market.”

“It appears we are entering a recession after 10 years of boom,” Armstrong wrote. “The recession could lead to another crypto winter, and it could last for a long time. Over the past winters, trading returns (our biggest source of income) have fallen significantly.”

The largest cryptocurrency exchange in the United States Struggle to hold on to users This year, as digital assets have cooled and The markets were rocky. In May, Coinbase said it lost hundreds of millions of dollars in the first quarter as trading fees fell sharply. The number of users transacting with Coinbase has also fallen, and the company said it expects trading volumes and users to decline again in the second quarter.

Since earnings report, Things are getting worse for cryptocurrency pricesCoinbase stock and markets in general. The price of Bitcoin is down nearly two-thirds from its highest level over the past year. On Monday, the S&P 500 stock index I entered a bear market Investors continue to offload risky assets while the Federal Reserve tries to tame the highest inflation in the US in decades. Investors expect the Fed to increase interest ratessap the appetite for assets that are seen as risky, such as Cryptocurrency and technology stock.

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Coinbase shares were trading at $50.60 on Tuesday, down 2.7%, after Coinbase posted a layoff notice as part of a Securities and Exchange Commission filing. When Coinbase went public in April of last year, its first stock trade was at $381.

WSJ’s Dion Rabouin explains why Wall Street is now betting so heavily on cryptocurrencies and what this means for the new asset class and its future. Composite photo: Elizabeth Smiloff

Last week, Mr. Armstrong tweeted criticizing a petition by Coinbase employees to remove some executives, not including Mr. Armstrong, from the company because “the executive team has recently made decisions that are not in the best interests of the company, its employees and its shareholders.”

on June 10

Twitter

Spanning 16 tweets, Mr. Armstrong said, “If you don’t have faith in CEOs or a CEO, why work at that company? Quit and find a company to work with that you believe in!”

Coinbase said it expects to have 5,000 employees after the layoffs and that laid-off employees will receive at least 14 weeks of severance payments.

write to Caitlin Ostroff at [email protected] and Nathan Becker at [email protected]

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