Coinbase Global, or COIN, is laying off around 18% of the workforce, which amounts to about 1100 employees, as part of a cost-cutting strategy, according to a filing on June 14. Coinbase first stated in May that it was reducing its recruiting goals but subsequently stated that it would cancel new employment offers.
Coinbase estimates that total restructuring costs will range between $40 and $45 million and will be implemented by the end of the second quarter. The new plan entails reducing the staff as of June 10, after which it would have approximately 5,000 total employees after the current quarter.
On June 14, Coinbase CEO Brian Armstrong sent a message to all the employees.
“We appear to be entering a recession after a 10+ year economic boom,” Armstrong said before hinting at another crypto winter.
The statement admits that the firm expanded too swiftly during the crypto bull market, growing from 1,250 employees at the start of the year 2021 to 2,500 employees by the end of it.
According to the message, outgoing Coinbase workers received the news through their personal emails after their access to Coinbase services was restricted.
Coinbase shares are down about 80% this year as the steep decline in cryptocurrency values has impacted the exchange’s transaction volumes. After the layoff news was disclosed, Coinbase shares jumped approximately 1% in pre-market trading on June 14.
Coinbase’s restructuring is the latest in a long series of layoffs at cryptocurrency firms. On June 13, lending platform BlockFi announced a 20% reduction in personnel, while cryptocurrency exchange Crypto.com announced a 260-job layoff, which is about 5% of its workforce. Before that, the Winklevoss-led exchange and custodian Gemini announced a 10% staff reduction.
The market is seeing its most severe downturn in over two years, with bitcoin currently trading at $21,313.67, about 68% lower than its all-time high of almost $69,000, reached last November.
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