Cryptocurrency exchange Coinbase laid off about 18% of its workforce — or about 1,100 people — on Tuesday, the company said.
Coinbase CEO and co-founder Brian Armstrong blamed an impending US recession and a coming “crypto winter” as the reasons the company is making the drastic cuts. A “crypto winter” is when prices “contract and stay low for an extended period,” according to Forbes.
Armstrong said, “Over the past crypto winters, trading revenue (our main source of revenue) has declined significantly. business in any environment.”
But he also admitted the business had grown too quickly. Coinbase went public last year, becoming the first major cryptocurrency company to do so.
“While we did our best to get it right, in this case it’s now clear to me that we’ve over-hired,” Armstrong said.
For some employees, the news was announced abruptly. The company cut off access to Coinbase systems for employees affected by the layoff. For this reason, notifications were sent to workers’ personal email addresses.
“Given the number of employees who have access to sensitive customer information, this was unfortunately the only practical choice, to ensure that even one person does not make a rash decision that harms the company or it. -even,” Armstrong said.