Today, Brian Armstrong, the CEO of Coinbase, conveyed to his team through a company-wide email that due to declining stock and crypto values and concerns about a possible economic downturn, cost-cutting measures are necessary. Thus, as outlined in the email, around 1,100 full-time employees, constituting approximately 18% of the workforce, have been laid off.
Armstrong expressed his views on the economic climate, stating, “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.” He emphasized the importance of preparing for challenging scenarios to ensure the company can continue to operate effectively in any market conditions.
Originally intending to pause recruitment for an unspecified duration, the recent market performance compelled Coinbase to take more drastic actions to manage its finances. Armstrong noted, “Our employee costs are too high to effectively manage this uncertain market,” adding, “While we tried our best to get this just right, in this case it is now clear to me that we over-hired.”
Employees impacted by the layoffs will be offered support through a tailored talent hub to aid them in securing new job opportunities. Meanwhile, the company plans to redirect the focus of many remaining staff toward projects with more immediate profitability.
Coinbase to cut 1,100 jobs amid crypto turmoil https://t.co/grrEuO6vb0 pic.twitter.com/1tr0Yn9J8I
— Reuters (@Reuters) June 14, 2022
Discussing the strategy moving forward, Coinbase President and COO, Emilie Choi, mentioned to CNBC, “If there are any cuts to new product areas, it’s going to be more around experimental venture areas that we’re still very bullish on, but that we don’t want to invest in in this part of the cycle.” Choi added, “We will continue to invest in incredible innovative areas of crypto that we think are emerging over the longer term, but we’re probably going to do those in a more measured way in this type of an environment.”
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