Coinbase is letting go nearly one-fifth of its workforce, as its stock price continues to slide during what appears to be a looming recessionary period for the US economy.
In an email sent to employees on Tuesday and seen by CNBC, US-based crypto exchange Coinbase announced it will let go about 1,100 of its 5,000 full-time employees, citing forthcoming unfavourable economic conditions and a poorly performing stock price. “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,” said CEO Brian Armstrong. “While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”
Earlier this year, Coinbase unveiled plans to create 2,000 new jobs across its product, engineering, and design sectors; however the company was soon forced to pause hiring— a freeze that was later extended for the foreseeable future. “Our employee costs are too high to effectively manage this uncertain market,” Armstrong explained. “While we tried our best to get this just right, in this case it is now clear to me that we over-hired.”
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The latest announcement comes at a dismal time for the crypto exchange, which is caught in the midst of a tech rout as investors offload riskier assets amidst surging inflation and stagnating economic output. Coinbase shares are down 79% since the beginning of the year, and have shed about 85% of their record-high. In the first quarter, the company reported a 27% drop in revenue as the number of users continue to decline.
Information for this briefing was found via CNBC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
