Coinbase, one of world's largest crypto exchanges, has announced the lay-off of 18 percent of its workforce in the backdrop of losses hitting the digital assets sector. The US-headquartered company has backed its decision by calling it a cost-cutting measure in these ongoing times of industrial dips. Coinbase CEO Brian Armstrong has confirmed the announcement just two months after he and other senior members of his team, pitched several jobs in India in April.
Over 1,000 employees of Coinbase are estimated to be jobless. Employees of the crypto exchange have received emails informing them about their job status.
The laid-off team members are being notified in their personal addresses because the company has already cut off the access to the Coinbase systems for them.
“Today I am making the difficult decision to reduce the size of our team by about 18 percent, to ensure we stay healthy during this economic downturn,” Armstrong wrote in a blog post.
Taking full accountability of hiring, Armstrong noted that the company had onboarded too many members in recent months, that was now hindering the firm's efficiency.
“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. For the past few months, adding new employees has made us less efficient. We have seen ourselves slow down considerably due to coordination headwinds, and difficulty fully integrating new team members,” Armstrong added.
Coinbase has claimed that it will provide severance packages, health insurances, and assistance in professional rehabilitation for team members that are being let go off.
Currently, the crypto market is struggling to overcome losses caused due to US' interest rate hikes, the crash of Terra and Celsius Network, as well as a low-risk appetite from investors in recession-like circumstances.
This week so far, the crypto market has already registered a decline of 13.74 percent, dragging the crypto market below the mark of $1 trillion (roughly Rs. 78,00,655 crore).
In May, Coinbase itself reported a 44 percent fall, the crypto exchange only managed to rope-in $1.17 billion (roughly Rs. 9,037 crore) in revenue in the first three months of this year.
In a bid to keep their businesses afloat, other crypto-related firms have also resorted to staff cut-off measures.
Earlier this week, Web3 firms, BlockFi and Crypto.com have announced lay-offs from their respective companies. Major shift in the macroeconomic conditions was cited as the reason behind almost 500 people losing their jobs collectively from BlockFi and Crypto.com.
These back-to-back lay-offs from crypto firms have created quite the ripples on social media.
American economist and millionaire Peter Schiff has noted that this is likely just the first round of layoffs, and a harbinger of many more to come throughout the crypto ecosystem and beyond.
“Without jobs many #HODLers may be forced to sell their Bitcoin,” Schiff wrote in a tweet.