The head of leading US-based crypto exchange is making significant company-wide layoffs in preparation for a crypto winter.
In a new blog post, Coinbase CEO Brian Armstrong announced the exchange will part with about 18% of its workforce, effective today.
“In the next hour every employee will receive an email from HR informing if you are affected or unaffected by this layoff. Every affected employee will receive an invitation to have a direct conversation with your HRBP and the senior leader of your organization…
I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you. Given the number of employees who have access to sensitive customer information, it was unfortunately the only practical choice, to ensure not even a single person made a rash decision that harmed the business or themselves.”
Armstrong said the difficult decision was made to manage expenses and increase efficiency in the face of potential recession and a crypto bear market.
“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 (>4x in the past 18 months) and our employee costs are too high to effectively manage this uncertain market…
We have now exceeded the limit of how many new employees we can integrate while growing our productivity. For the past few months, adding new employees has made us less efficient, not more. We have seen ourselves slow down considerably due to coordination headwinds, and difficulty fully integrating new team members.”
As CEO, Armstrong took responsibility for the mistake of hiring too many employees too quickly in rapidly changing economic conditions where cost management is critical.
“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period…
Coinbase has survived through four major crypto winters, and we’ve created long-term success by carefully managing our spending through every down period…
While we tried our best to get this just right, in this case it is now clear to me that we over-hired.”
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