Coinbase is laying off 18% of its employees less than two weeks after the company said it would extend a hiring freeze and rescind some accepting offers.
The crypto exchange
cited the rapidly changing economic conditions, the needs for managing costs, and the company’s previous over-hiring as reasons for the decision, Brian Armstrong, chief executive and co-founder at Coinbase wrote in a blog post Tuesday.
“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 past crypto winters, trading revenue (our largest revenue source) has declined significantly.”
The exchange’s net revenue for the first quarter fell to $1.17 billion from $1.60 billion a year before. It reported trading volume of $309 billion for the first quarter, compared with $547 billion in the last quarter of 2021.
Coinbase had been expanding rapidly. In February, the company said it planned to add 2,000 employees in 2022. It hired 1,200 employees in the first three months of the year, pushing its total headcount to 4,948 as of March 31, nearly tripling the number of employees from a year earlier.
Coinbase’s decision comes after crypto lending platform BlockFi said Monday that it would slash about 20% of its head count. Crypto.com announced over weekend that it would lay off 260 people, or 5% of its workforce, while Gemini said early this month that it would let go 10% of its employees.
Bitcoin plunged to as low as $20,834 late Monday, the lowest level since December 2020, according to CoinDesk data. The weakness comes as lending platform Celsius announced it was pausing all withdrawals and transfers amid “extreme market conditions.”