Coinbase will cut the size of its workforce by about 18% — or more than 1,000 people — to weather the market slump in crypto.
In a blog addressed to staff on Tuesday, CEO Brian Armstrong wrote that the decision had been made to "ensure we stay healthy during this economic downturn." He also said that Coinbase had grown too quickly and had “over-hired.”
The Coinbase team quadrupled over the last 18 months to about 5,000 employees. According to an SEC filing by Coinbase, approximately 1,100 of those employees will now be laid off.
"As we operate in this highly uncertain period in the world, we want to ensure we can successfully navigate a prolonged downturn... Our employee costs are too high to effectively manage this uncertain market. The actions we are taking today will allow us to more confidently manage through this period even if it is severely prolonged," said Armstrong.
Affected employees will be notified via their personal emails, he added, as the company has decided to cut their access to the Coinbase system due to some having access to sensitive customer information.
Those laid off will receive a minimum of 14 weeks of severance plus an additional two weeks for every year of employment beyond one year, four months of health insurance if US-based, four months of mental health support, and access to Coinbase's Talent Hub.
Coinbase estimates it will incur $40-$45 million in total restructuring expenses related to employee severance and other termination benefits.
The company has been tightening its belt over the last couple of months as the crypto market experiences a downturn. In late May, it launched a cost-cutting initiative aimed at helping to grow revenue. Two weeks later, it announced it had rescinded some job offers to candidates and was extending an existing hiring freeze.
But it's not alone. Crypto lending startup BlockFi announced yesterday it too would reduce its staff by about 20%, while in a tweet on Saturday, Crypto.com CEO Kris Marszalek revealed plans to lay off 260 workers, 5% of the company’s workforce.
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