June 15, 2022
By Murtuza Merchant
Amid bearish market sentiments, leading crypto exchange Coinbase has announced it is slashing 18% of its workforce, or about 1100 employees, contending that recession is about to begin after a 10-year economic boom, which could last for an extended period.
In a note shared with employees, Coinbase CEO Brian Armstrong said at the beginning of 2021, the company hired massively to keep up with the new use cases enabled by crypto getting traction practically every week
“.. it is now clear to me that we over-hired,” he said.
“Our team has grown very quickly (>4x in the past 18 months) and our employee costs are too high to effectively manage this uncertain market. The actions we are taking today will allow us to more confidently manage through this period even if it is severely prolonged,” Armstrong said.
The co-founder further added that for the past few months, adding new employees made the organization less efficient and slowdowns were seen due to coordination headwinds, along with difficulties in fully integrating new team members.
Coinbase joins a string of companies that have announced a significant slashing of their headcounts.
Cryptocurrency exchange Crypto.com CEO Kris Marszalek has announced laying off about 260 people, or 5% of its corporate workforce, while cryptocurrency lender BlockFi will reduce its staff by around 20%.
Earlier this month, crypto exchange Gemini had cut down 10% of its staff citing the ongoing crypto downturn alongside macroeconomic and geopolitical factors as reasons for the downsize.
In April, crypto derivatives platform BitMEX had let go 75 employees, about a quarter of its workforce, while Argentinian exchange Buenbit laid off 80 employees, almost half of its roster. Latin America’s Bitso also let go of 80 employees, representing 11% of its personnel.
Meanwhile, one of the largest crypto exchanges Binance continues to hire new employees, with about 2000 positions open across departments for engineers, product, marketing, and business developers.
Sam Bankman-Fried, co-founder of crypto exchange FTX tweeted, “We’re at about 300 now and growing, but sustainably–some come, some go, but we’re increasing ~50% year over year.”
“Maybe we’ll get to 400 in the next year. But when it comes to hypergrowth, you can’t replace ‘growing revenue’ with ‘growing expenses’,” he said in another tweet.
About the author
Murtuza Merchant is a senior journalist and an avid follower of blockchain and cryptocurrencies.