Cryptocurrency platform Coinbase saves 18 percent of employees – company says it has grown ‘very fast’

Coinbase, the US-listed cryptocurrency platform, is laying off 18 percent of its employees, or nearly a fifth of its workforce.

Writes CNBC Tuesday afternoon Norwegian time, and refers to the circular sent to Coinbase employees today.

The cut will affect full-time employees, and mean about 1,100 people will lose their jobs.

CEO Brian Armstrong notes in the email that the economy is heading into a potential recession, and that the company has grown “very quickly” during previous spikes in the cryptocurrency market. Later also took to Twitter to report the cuts.

The termination notice comes in the middle of some tough months for the crypto market. The two largest currencies, Bitcoin and Ethereum, have plummeted to levels not seen in two years, while investors have slipped away from the high-risk investments that have become so popular during the pandemic.

“cryptoventer”

In an email to employees, Senior Director Armstrong said the company now needs to “address” so-called cash burn and increased efficiency.

After a recovery period of more than ten years, we seem to be heading towards a recession. A recession could lead to a new “crypto winter” and last longer. Although it is difficult to predict the economy or the market, we always plan for the worst possible outcome, Armstrong said, according to CNBC.

The announcement of the cut also comes after the company said earlier this year that it had suspended new hires, before announcing shortly thereafter that the pause on new hires had been extended indefinitely.

Our personnel costs are too high to handle efficiently in such an uncertain market. “Even though we did our best to do it right, it’s now clear that we’re hiring a lot,” Armstrong continued.

This news also comes after Coinbase’s stock plunged after last year’s listing.

Billions erased from their value

In fact, it has only been more than a year since the cryptocurrency exchange was publicly launched in April of last year.

On the first trading day, the market capitalization exceeded $100 billionIn what was supposed to be a turning point for cryptocurrency players in the traditional stock market. Meanwhile, Bitcoin and Ethereum are trading at high levels, and last fall they reached new highs of around $65,000 and $4,600, respectively.

On the way out of the pandemic, optimism and appetite for what can be described as risky investments have remained high.

Since then, however, it has fallen sharply, for a number of cryptocurrencies, but also for Coinbase and other cryptocurrencies on the exchange.

Coinbase shares are down 79 percent so far this year, and are down more than 80 percent since the first trading day in April of last year. The stock is trading at about $52, which puts the company at just over eleven billion dollars.

Terminations and breakdown

As a result of the recent sharp and widespread decline in the cryptocurrency market, Coinbase is not alone in pressing the brakes.

Earlier this week, crypto bank Blockfi, which has owner-side investor Peter Thiel, had to report a 20% cut of its staff. External and macroeconomic factors were also cited there as a reason for the dismissals, according to CNBC.

On Monday, Celsius Network, a crypto bank, also announced Celsius Network They are suspending all withdrawals due to “extreme market conditions”.

A message from the company published Monday morning stated that the company is now pausing all withdrawals and transfers between accounts.

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