Coinbase News: Over 1,000 Employees Laid Off
Recent Coinbase news about lay-offs came as no surprise and confirmed the fact that even the most prominent players can go through a panic attack enhanced by the current happenings within the cryptocurrency industry.
Brian Armstrong, the CEO of the cryptocurrency exchange Coinbase, confirmed laying off over 1,000 employees, warning of an imminent recession and “crypto winter”. In his note, Armstrong confirmed the company went on an unnecessary hiring spree during the recent price boom in this sector.
“We grew too quickly. While we tried our best to get this just right, in this case it is now clear to me that we over-hired,” he admitted.
Armstrong also asserted he did hold numerous talks with the company’s management during the last few days and that they decided that laying off was the only possible decision.
“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter and could last for an extended period,” Armstrong wrote in the note to employees, adding that due to quadruple growth in the last 18 months, the company’s employee costs became “too high" to manage this uncertain market effectively.
Laid-off employees were promised a minimum of 14 weeks of compensation, four months of health insurance, including four months of mental health support, and access to Talent Hub, where they can access other open positions at other companies.
The situation escalated after the now-infamous digital lending platform Celsius Network halted all of its operations, including withdrawals, swaps, and transfers. According to the last information, Celsius reportedly hired restructuring lawyers to advise on possible solutions to its bumpy financial situation.
Other Crypto Companies Struggle
During the last few days, some other companies within the industry also have resorted to layoffs. One of the biggest exchanges Gemini laid around 10% of its workforce earlier in June, while banking app Curve fired around 100 employees after it reported an operating loss of £37.9 million. Cryptocurrency exchange and wallet BlockFi also confirmed firing approximately 20% of its workforce due to “the challenging market environment”.
On the other hand, Binance CEO Changpeng Zhao stated a potential forthcoming crisis could actually be good for business.
“It’s not the first time we’ve gone through a crypto winter. If we are in a crypto winter, it would be my third and Binance's second. So it's not the first time we’ve been through this,” CZ said.
He added that his company plans to hire more people since “during bull markets, everyone is starting their own projects, and everyone is getting paid a ridiculous amount of compensation. Now the markets are more balanced, so top talents are available, and we want to hire them,” he concluded.
Coinbase, which went public last year with share prices hovering around the $350 mark, has lost its momentum and was trading at nearly $49 per share pre-market at the time of writing.
Author: Teuta Franjkovic
A sincere writer with a strong will to share knowledge on all things blockchain, crypto, metaverse and DeFi. Starting out as a writer with Cosmopolitan, Teuta has risen through the ranks of business journalism, editing newspapers and websites within the fintech industry for over 15 years. She holds a double MA in Public Politics and Entrepreneurship.