As crypto’s crisis intensifies, Coinbase will lay off 18% of employees.
Coinbase Global Inc, a cryptocurrency exchange, stated that it will lay off 18 percent of its workers, signaling yet another symptom of a deteriorating crypto slump that has cut trillions of dollars off the overall cryptocurrency market value.
The corporation intends to lay off around 1200 people, completing the current quarter with approximately 5,000 personnel.
Coinbase Global, a cryptocurrency exchange, stated on Tuesday, June 14, that it will lay off 18% of its personnel, signaling yet another evidence of a deepening crypto slump that has resulted in a loss of hundreds of millions of dollars in total bitcoin market value.
Coinbase, one of the largest US-based crypto exchange firms, is following in the footsteps of other cryptocurrency-related businesses that have lately laid-off employees. This includes competitive exchange Gemini Trust and lender BlockFi, both of which blamed the layoffs on the beginning of a crypto winter slowdown.
Coinbase has been actively hiring in recent years, with its staff increasing by over 1,200 individuals this year. The corporation intends to lay off nearly that many people, concluding the current quarter with approximately 5,000 employees.
Until recently, the firm refused to recognize the coming of crypto winter, despite the fact that its shares had been declining since going public more than a year ago. According to reports, they are down over 80% year to date.
Employees who are laid off will get at least 3.5 months of severance pay, plus two weeks for every year of service.
The cryptocurrency crash began soon after Bitcoin reached an all-time high in November. The collapse of the TerraUSD stablecoin and accompanying Luna token earlier this year wiped out billions of dollars in market profits.
Coin values had plummeted in the last week when cryptocurrency lender Celsius Network blocked withdrawals during what many assume was a bank-run-like scenario.
Coinbase’s objective is “that this is a one-time occurrence,” according to Choi, who also stated that the business had $6 billion in cash on its balance sheet. The corporation has already seen repeated bear markets in cryptocurrency, commonly known as “crypto winters.”
“We will power through any macro-environment, any crypto winter, or whatever else that comes our way,” she stated. “The fact is, however, that we must adjust when we perceive a very dynamic economic environment in action.”
As their stocks have fallen, tech businesses have been dealing with poor morale and attrition. Last week, a petition on a decentralized publishing platform asked for the ouster of many Coinbase officials, including Choi, and a “vote of no confidence.”
Armstrong drew attention to the since-deleted petition and invited staff to go if they didn’t believe in the firm in a Tweet.
“We will always encourage our staff to provide input on how we function as a company — and we have a lot of systems in place to do so.” “It’s unclear if this material came from within the firm,” Choi added.
“However, if it did, we’re sorry that those behind it felt compelled to violate the trust of the firm and their coworkers by disseminating this material in a way that was plainly geared to spark controversy rather than productive conversation.”
Coinbase has no plans to issue further firm share awards or financial compensation as a result of the price reduction, according to Choi. The firm provides yearly awards in part to help employees “mitigate the swings” and volatility in cryptocurrency. The COO compared it to Amazon or Tesla for staff and investors: a long-term investment with instability in the meanwhile.
“We believe that everybody who makes an investment, whether as an employee or an investor, would benefit handsomely in the long run,” Choi added. “Coinbase is a long-term play – we have a strong belief in the stock’s long-term worth.”