Since the beginning of the year, the cryptocurrency market has suffered a series of tumbles, facing the threat of a wildfire-like bear market. The US cryptocurrency exchange Coinbase announced that it will lay off 1,100 people, accounting for 18% of its staff. It is expected that after this layoff, the actual number of employees will drop to about 5 Thousands.
Brian Armstrong, CEO and co-founder of Coinbase, said that in order to combat the looming recession and “crypto winter” in the U.S., the company must streamline its workforce and slash expenses:
Over the past crypto winter, trading revenue (our largest source of income) has dropped significantly. While it is difficult to predict where the economy or the market will go, we always prepare for the worst so that we can operate in any environment.
Since the beginning of the year, the cryptocurrency market has suffered a series of tumbles, facing the threat of a wildfire-like bear market. The US cryptocurrency exchange Coinbase announced that it will lay off 1,100 people, accounting for 18% of its staff. It is expected that after this layoff, the actual number of employees will drop to about 5 Thousands.
Brian Armstrong, CEO and co-founder of Coinbase, said that in order to combat the looming recession and “crypto winter” in the United States, the company must streamline its workforce and slash expenses:
Over the past crypto winter, trading revenue (our largest source of income) has dropped significantly. While it is difficult to predict where the economy or the market will go, we always prepare for the worst so that we can operate in any environment.
Founded in 2012, Coinbase has since grown into the most important company in the cryptocurrency market, listing directly on the Nasdaq exchange last April. In this regard, Brian Armstrong also admitted that the company has grown too fast. At the beginning of last year, the number of employees was only about 1,250, and now it has expanded to about 6,120.
Coinbase said laid-off employees will receive at least 14 weeks of pay, with an additional two weeks of pay for every full year of seniority. Including employee severance and other termination benefits, Coinbase estimates this will incur “restructuring charges” of about $40 million to $45 million.
The news of Coinbase’s decision to lay off employees came suddenly, and there seemed to be no room for negotiation. Instead, severance notices were sent directly to employees’ personal emails, and even cut off access to the company’s systems. Brian Armstrong explained that the move is to ensure the security of user data.
It’s been a rough year for the cryptocurrency market, and many crypto firms are downsizing: Gemini, the exchange founded by the Winklevoss brothers, has cut about 100 jobs (10%); lending firm BlockFi has cut about 170 jobs (20%) ; Exchange Crypto.com lays off 260 employees (5%).
Seeing the wave of layoffs in the currency circle, Sam Bankman-Fried (SBF), CEO of cryptocurrency derivatives exchange FTX, said that since FTX has always been very cautious in recruiting talents, there is no plan to reduce manpower at present. He pointed out that FTX currently has about 300 employees and is growing steadily, and is expected to expand to 400 next year.
SBF admitted frankly that the most unsatisfactory aspect of FTX by VCs last year was the “inadequate expansion of personnel”. He pointed out that FTX had about 200 employees at the time, but VCs believed that the ideal number of employees for FTX should be 2,000. But SBF did not follow the advice of the venture capital, and told them that expanding too fast would only have a negative impact on the company, and if they couldn’t accept it, they could choose to leave.
In fact, the current state of the cryptocurrency job market does not look too bleak. For example, the cryptocurrency exchange giant Binance has chosen to expand against the trend and is currently actively hiring more staff for engineers, products, marketing and business. Developers offer more than 2,000 vacancies.
Tron founder Justin Sun also announced on Twitter that all his companies are recruiting manpower, hoping to expand the number of employees by 50%.
In addition, blockchain analysis companies Dune Analytics and Delphi Digital have also issued invitations to Coinbase’s layoffs.
