It has already been a challenging couple of months for the crypto sector and nobody is feeling the heat more than crypto-related employees who have been dropping like flies in recent weeks.
After initially freezing hiring, Coinbase has become the latest company to lay off workers as the market sees difficult times. The company is trimming 18% of its workforce, which equates to over 1,000 employees.
Coinbase Anticipates Extended Crypto Winter
According to a Tuesday blog post penned by Coinbase CEO Brian Armstrong, the company is reducing its headcount by 18% in an effort to remain healthy in the difficult macroeconomic environment.
Armstrong noted that the company expanded too quickly during the bull market and had “overhired”. The Coinbase workforce grew from 1,250 employees at the beginning of 2021 to around 5,000. The company is now letting go of 1,100 of these employees, according to a filing with the U.S. Securities and Exchange Commission.
The layoffs are expected to help the business endure the fast-approaching global recession, which “could lead to another crypto winter, and could last for an extended period.”
The outgoing employees will be notified of their fates through their personal emails, the CEO posited, as the company had limited their access to Coinbase systems due to some having access to sensitive customer data.
Coinbase expects the decision today to cost $40-$45 million in terms of employee severance and a handful of other termination benefits for the affected individuals.
Ongoing Crypto-Related Lay Offs
Coinbase employees who have lost their jobs will receive 14 weeks of severance pay and will have access to the firm’s newly-launched Talent Hub to search for opportunities elsewhere.
The layoffs at Coinbase are only the latest in a disturbing trend of crypto-related job losses that are rocking the industry. Gemini, BlockFi, Bitso, and Crypto.Com have also announced job losses in recent weeks in response to the ongoing market downturn.
The crypto market is currently experiencing its steepest reversal in over two years, with bitcoin teetering around $21,924 — 67.4% lower than its historic high of $69,044 set back in November 2021.
The knock-on effects of the bearish markets are causing mayhem in terms of expansion and growth for cryptocurrency firms. But while these companies reduce their staff, the world’s largest exchange by trading volume, Binance, is actively hunting for new employees.