The gloom in cryptocurrencies continued into Tuesday with one of the biggest trading platforms in the sector announcing it will be laying off 18 per cent of its staff.
Coinbase, which went public in a highly touted IPO last year, announced the layoff plans in a blog post authored by the company’s president, Brian Armstrong, who said that after boosting its headcount by more than 300 per cent since the start of 2021, “it is now clear to me that we over-hired.”
“We appear to be entering a recession,” Armstrong said. “A recession could lead to another crypto winter, and could last for an extended period.”
Cutting 18 per cent of Coinbase’s staff works out to about 1,100 people losing their jobs.
The layoffs add to the 20 per cent cuts announced by BlockFi and five per cent at Crypto.com announced on Monday, when prices for cryptocurrencies such as Bitcoin plunged to their lowest level since 2020.
The sell-off in cryptocurrencies continued on Tuesday, as the price of Bitcoin briefly dipped below $21,000 US. The value of the world’s biggest cryptocurrency has fallen by 20 per cent in the past three days and is down by roughly two thirds after hitting an all-time high near $70,000 US last November.
Armstrong said any staff losing their job will be told so on their personal emails “because we made the decision to cut access to Coinbase systems for affected employees.”
“Coinbase employees are among the most talented in the world, and I am certain that the skills you all possess will continue to be sought after by companies around the world,” said Armstrong, who has a net worth of $2.1 billion US, largely based on his ownership stake in the company.
Coinbase says the severance packages will cost the company roughly $45 million US.