Digital currency exchange Coinbase has said it will lay off 18 percent of its workforce
Digital currency exchange Coinbase said on Tuesday it will lay off 18 percent of its workforce, citing tight economic conditions and an overly rapid expansion as the cryptocurrency market tumbles.
The layoffs at Coinbase equate to about 1,100 positions, the platform said in an exchange filing.
This “tough decision” was made “to ensure we remain healthy during this economic downturn,” CEO and co-founder Brian Armstrong said in a statement.
“We seem to be entering a recession after an economic boom of more than 10 years.”
Bitcoin plunged to an 18-month low below $23,000 on Monday amid a wide-ranging cryptocurrency crash as investors eschewed risky assets in the face of a brutal sell-off in global markets just seven months after the virtual unit soared to an all-time high.
With stock markets struggling since the start of the year and inflation at a four-decade high, tighter monetary policies around the world have helped the crypto industry plummet.
Coinbase, a platform that allows users to buy and sell cryptocurrency, already warned in mid-May that the number of active users was declining. The group posted a net loss of $430 million in the first quarter of 2022.
The company believes that “controlling our costs is critical” as the market is in a downturn, Armstrong said, noting that the company has already endured several periods of decline in cryptocurrency value.
But this time “we grew too fast,” he said. Coinbase went from 1,250 employees in early 2021 to more than 6,000 now.
The platform has not changed its forecasts for the year, but warned that the results would likely be at the lower end of the forecast range.
Shares of Coinbase fell 6.2 percent in pre-market trading, after falling 11.4 percent on Monday.
The US tech sector is in a period of high volatility, with many start-ups announcing layoffs, while giants like Facebook, Amazon and Uber have warned that they are slowing the pace of recruitment.
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