BIT-TER COLD LOSSES
‘Crypto winter’ layoffs
The CEO of Coinbase said Tuesday he’s laying off more than 1,000 of the cryptocurrency exchange’s employees, warning of an impending recession and “crypto winter.”
The news comes as cryptocurrency markets tank, with bitcoin dipping late Monday below $21,000, its lowest level since 2020. Smaller coins have fared even worse.
“We appear to be entering a recession after a 10+ year economic boom,” CEO Brian Armstrong said in a note to employees. “A recession could lead to another crypto winter, and could last for an extended period.”
Armstrong said Coinbase’s revenue had “declined significantly” during past crypto pullbacks and that layoffs would help the company survive the current downturn.
In a Securities and Exchange Commission filing Tuesday, Coinbase said roughly 1,100 employees will be axed, adding that it expects to “incur approximately $40 million to $45 million in total restructuring expenses.” The layoffs come weeks after Coinbase rescinded job offers to would-be employees who had already accepted them.
Crypto.com, BlockFi and Gemini, three other crypto trading sites, also have laid off hundreds of employees this month.
79% plummet
Coinbase went public in April 2021 near the peak of the cryptocurrency market. Its shares closed Tuesday at $51.58, and have plummeted more than 79% so far this year.
In the note, Armstrong admitted, “We grew too quickly. While we tried our best to get this just right, in this case it is now clear to me that we overhired.”
Laid-off employees will get at least 14 weeks of severance, plus four months of health insurance and mental health benefits, Armstrong said.
Some axed employees, who were locked out of their work accounts before the announcement, took to corporate forum Blind to vent and look for work.
“I came here to build and really believed in the mission of Coinbase, but here I am with less than a few months of savings, and a baby on the way, lost my job today,” one laid-off employee wrote.
Coinbase declined to comment beyond Armstrong’s email.