One of the leading cryptocurrency exchanges, Coinbase, is reducing its workforce by 18% due to concerns that a recession will lead to a crypto winter. CEO Brian Armstrong emailed approximately 5,000 full-time employees, resulting in a slashing of nearly 1,100 jobs.
The layoffs come just one day after Bitcoin dropped as low as $21,000.
“A recession could lead to another crypto winter, and could last for an extended period,” he said. “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.”
Armstrong stated that as Coinbase has grown rapidly over the last two years, it has begun to operate less efficiently at its new scale.
“At the beginning of 2021, we had 1,250 employees. At the time, we were in the early innings of the bull run and adoption of crypto products was exploding,” he wrote.
He stated that while the Coinbase team has grown fourfold in the last 18 months, there has been a slowdown because of coordination challenges and the difficulty of fully integrating new team members.
Also read: BlockFi to Lay off 20% of Employees Amid Market Crash
Employees affected by job cuts will be notified via personal email because Coinbase has restricted their access to company systems.
They are expected to receive at least 14 weeks of severance pay, plus an additional two weeks for each year of service beyond one year.
The affected employees would also receive four months of COBRA health insurance in the U.S. as well as four months of global mental health support.
They would also have access to Coinbase’s talent hub, where Coinbase intends to work to match affected employees with open positions at other companies.
