Coinbase plans to lay off 1,100 employees or 18% of its workforce, CEO Brian Armstrong said Tuesday, marking another crypto exchange that has cut jobs in recent weeks.
“It looks like we are entering a recession after an economic boom of more than 10 years,” Armstrong said in a company blog post. “A recession could lead to another crypto winter and could last for an extended period,” he wrote, referring to a period in which cryptocurrency prices fall and stay low for weeks.
“In previous crypto winters, trading revenue (our largest source of income) has dropped significantly,” Armstrong said in the blog post. “While it is difficult to predict the economy or the markets, we always plan for the worst so that we can operate the business in any environment.”
Coinbase is one of the world’s largest crypto exchanges with 98 million users and $256 billion in assets on the platform. The company will end the layoffs by the end of June, the company said in a regulatory filing. The company expects to spend between $40 million and $45 million on “employee severance and other termination benefits.”
The layoffs are the latest chapter in Coinbase’s recent struggles. company last monthas active monthly users decreased by 19%. The company also instituted a hiring freeze this month, adding that some job offers could even be terminated.
Armstrong said that Coinbase, which now has around 5,000 employees, is laying off workers after the company hired too many people too fast. Coinbase started last year with around 1,250 workers, the CEO said, but soon after he noticed that “crypto product adoption was exploding.” At the time, company officials had to decide how many additional employees were needed to cover the cryptocurrency craze, Armstrong said.
“While we did everything we could to get this right, in this case it’s now clear to me that we overhired,” Armstrong said.
The Coinbase layoffs come amid a huge sell-off in the broader cryptocurrency market. Some investors are turning away from risky investments in favor of more stable assets amid deepening economic concerns and as the economy grapples with the.
The total market value of cryptocurrencies fell below $1 trillion on Monday to $983 billion, the first time it has fallen below that mark since January 2021, according to CoinMarketCap.
Popular cryptocurrencies including ether, solana and tether have lost value in the sell-off, while bitcoin has fallen to its lowest price since December 2020, according to Bloomberg News. Those drops are also causing layoffs at Coinbase’s competitors.
Crypto.com plans to lay off 260 employees, or 5% of its workforce, company CEO Kris Marszalek said in a tweet on Friday. Earlier this month,, owned by Winklevoss twins Cameron and Tyler, said it plans to lay off 10% of its staff, marking the first time the company has had to cut jobs, Bloomberg News reported. The crypto platforms Bitso, Buenbit and Mercado Bitcoin have also laid off workers.