Top cryptocurrency major exchange Coinbase on Tuesday announced yet another cost cutting measure in the wake of the latest crash. It said it is forced to take the decision to cut Coinbase employee size due the ongoing economic downturn.
This comes after it announced a hiring spree only last month after suffering losses in the first quarter. On May 17, it announced the decision to cut down hiring after losing $420 million in the quarter.
Coinbase To Cut Workforce
Terming it a ‘difficult decision’, Coinbase CEO Brian Armstrong said the exchange is reducing size of its workforce by 18%.
Armstrong cited rapidly changing economic conditions as the reason behind the decision. He warned that recession led crypto winter could last for longer period. He added that it is hard to predict the economy or the markets. Planning for the worst would prepare for operating the business through any environment, he explained.
“We appear to be entering a recession after a 10+ years of economic boom. A recession could lead to another crypto winter, and could last for an extended period.”
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The exchange, the CEO said, has survived through four major crypto winters. “Down markets are challenging to navigate and require a different mindset.”
Too Quick A Growth At Coinbase
Armstrong indicated that Coinbase had overhired since the beginning of 2021, when it had 1,250 employees. Since then, the exchange grew its team by 200% year on year with a vision to expand capabilities in the crypto space. Given the scale of our growth, it is challenging to grow at just the right pace, he felt.
In the wake of the economic downturn, Coinbase is focused on cutting costs. He explained,
“As we operate in this highly uncertain period in the world, we want to ensure we can successfully navigate a prolonged downturn. Our team has grown very quickly and our employee costs are too high to effectively manage this uncertain market.”
The Coinbase CEO said the goal is to become efficient with less resources. “We believe the targeted resourcing changes we are making today will allow our organization to become more efficient.”
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