Coinbase Cuts 1,100 Jobs as Crypto Winter Begins

The logo of Coinbase Global Inc, the largest cryptocurrency exchange in the U.S., is displayed on the Nasdaq MarketSite jumbotron and others in Times Square in New York, U.S., April 14, 2021. REUTERS/Shannon Stapleton/ file photo

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June 14 (Reuters) – Coinbase Global Inc (COIN.O) will cut around 1,100 jobs, or 18% of its workforce, the cryptocurrency exchange, the latest company preparing to ride out a recession in the US, said on Tuesday. the cryptosphere.

The cryptocurrency market has been hit by extreme volatility as investors dumped risky assets fearing higher inflation readings would force the US Federal Reserve to become more aggressive in raising interest rates and push the economy into a recession.

“It looks like we are entering a recession after an economic boom of more than 10 years. A recession could lead to another crypto winter and could last for an extended period,” CEO Brian Armstrong said in a blog post.

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Bitcoin, the world’s largest cryptocurrency, fell as much as 14% on Monday after cryptocurrency lender Celsius Network froze withdrawals and transfers. read more

Armstrong said employees would receive an email letting them know if they had been affected, without elaborating.

Coinbase had said earlier this month that it would extend a trading freeze and rescind a number of accepted offers to deal with current macroeconomic conditions.

Shares of the company fell about 5% in early trading, and will add to its roughly 80% drop this year.

The crypto market crash has forced companies like BlockFi and Crypto.com to cut hundreds of jobs, while major companies including Meta Platforms (META.O) and Intel Corp (INTC.O) have also curbed hiring. . read more

Coinbase had ramped up hiring as the crypto market hit new highs during the pandemic, increasing the number of employees nearly fourfold in just five quarters.

“This level of headcount growth over five quarters was overly ambitious, especially given that the company has lived through a crypto winter and knows how volatile this market can be,” KBW analyst Kyle Voigt said in a note to clients on Monday.

Coinbase expects to incur between $40 million and $45 million in total restructuring expenses, largely related to employee severance and other termination benefits.

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Information from Nivedita Balu and Chavi Mehta in Bengaluru; Edited by Amy Caren Daniel and Sriraj Kalluvila

Our standards: the Thomson Reuters Trust Principles.

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