Coinbase Lays Off Around 1,100 of Its Employees

The crypto exchange is reducing its staff numbers by about 18%, with CEO Brian Armstrong indicating the firm grew too fast. 

Coinbase Lays Off 18% of its Staff, to Retain a Total of 5000 Employees 

Coinbase Global (COIN) is shedding off about 1,100 workers as part of its efforts to pull down the cost of operations, according to the reports of the company’s filing on 14th June 2022. In May, the company had indicated that it was hiring but later called off the new job offers. 

The plan entails cutting down the workforce by 18% as of 10th June, which means that Coinbase will be left with about 5000 employees by the end of the second quarter of 2022. The restructuring process would cost the company about USD40-45 million. 

On Tuesday morning, Brian Armstrong, the CEO of Coinbase, published a note that he shared with employees. “We appear to be entering a recession after a 10+ year economic boom,” Armstrong pointed out. 

The note also explained that the firm grew too fast during the bull market that started in early 2021. The outgoing staff got the news in their email addresses once access was cut from the Coinbase system

Mizuho Reviews Coinbase Price Targets Down Due to Layoffs 

This year, Coinbase stock is down by about 80%, a sharp dip that has hurt the company’s transaction volumes. After the layoffs on Tuesday, the shares of the company rose by 1% during pre-market trading. However, they were down by 3% during regular trading hours. 

The news about the layoff also saw Mizuho lower Coinbase’s price targets from USD60 to USD45. Mizuho explained it was concerned that reducing the number of employees might hurt the company’s efforts to identify and take advantage of new revenue streams. It could also open price wars with competitors. 

Coinbase joins the growing list of crypto companies that are downsizing as the market contracts. Others, including BlockFi and Gemini, have cut down staff by 20% and 10%, respectively.

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