Coinbase Fires 18% of Employees As CEO Says, “We Grow Too Fast”

Coinbase CEO Brian Armstrong speaks at a conference and gestures with his hand.
Enlarge / Coinbase CEO Brian Armstrong speaks during the Milken Institute Global Conference on May 2, 2022 in Beverly Hills, California.

Getty Images | Patrick T. Fallon

Cryptocurrency exchange Coinbase is laying off 18% of its employees, the company announced today. The layoffs will cut 1,100 employees at the largest crypto exchange in the US, leaving it with about 5,000 employees, Coinbase said in a Securities and Exchange Commission submit.

“In the next hour, every employee will receive an email from human resources informing you if you are affected or unaffected by this layoff,” CEO Brian Armstrong wrote in a statement. memo for staff was posted on the company blog. Fired employees “will receive this notice in your personal email, as we have made the decision to cut off access to the Coinbase system for affected employees.”

Armstrong wrote: The immediate severance from Coinbase systems was necessary because of “the number of employees with access to sensitive customer information.” This is “the only realistic option, to ensure no one makes hasty decisions that harm the business or themselves,” he wrote.

Cryptocurrency Market Roadmap

Coinbase layoffs come amid Cryptocurrency Market Roadmap affects bitcoin, ether and other cryptocurrencies. Some other crypto companies Announcement of major staff cuts recently. Coinbase’s share price has dropped more than 33% since May 31.

According to Armstrong’s memo, Coinbase has more than quadrupled its headcount over the last year and a half. “We grew too fast,” Armstrong wrote. “At the beginning of 2021, we had 1,250 employees. At the time, we were in the early stages of a bull run and the adoption of crypto products was exploding.”

But now, the CEO has written, “We appear to be entering a recession after an economic boom of more than 10 years,” which “could lead to another and possibly prolonged crypto winter.” Over the past crypto winters, transaction revenue (our biggest source of revenue) has dropped significantly.”

“Coinbase’s staff costs are too high to effectively manage this uncertain market,” and “over the past few months, adding new employees has made us less efficient, not more.” , wrote Armstrong. “We find ourselves slowing down significantly due to coordination difficulties and difficulty fully integrating new team members. We believe the changes in sourcing targets we’re making are what we’re doing. today will allow our organization to become more efficient.”

Fired workers will be furloughed for 14 weeks, Armstrong writes, plus an additional two weeks for each year of service after one year. Coinbase “estimates that it will incur approximately $40 million to $45 million in total restructuring costs,” primarily from layoffs, the SEC filing said.

During Q1 2022, Coinbase report revenue of $1.2 billion and a net loss of $430 million after posting higher profits and revenue numbers for each quarter of 2021.

CEO urges disgruntled workers to quit

Last week, a petition from Coinbase employees called for a “vote of no confidence” and the removal of several senior executives. Armstrong Reply on Twittercalled the petition “really stupid on so many levels,” in part because it was aimed at executives, not Armstrong himself.

“First of all, if you want to do a vote of no confidence, you should do it for me and not blame the people who do. Who do you think is running this company? I’m a little offended. put in :),” Armstrong wrote. He added that “if you don’t trust the people running or the CEO of a company then why would you work at that company? Quit your job and find a company to work for that you believe in. thought!”

Armstrong also clashed with employees in 2020 when he tell them must not “debate about political causes or candidates internally that are not related to the job.” Sixty Coinbase employees later accepted one Recommend repurchase It’s a perform “available to any employee who does not feel they can work in this direction.”

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