Cryptocurrency exchanges Coinbase and BlockFi are laying off hundreds of staff members, amounting to a fifth of their workforce, as they struggle to survive the second wave of the ongoing cryptocurrency crash.
Employees of Coinbase, once the leading US cryptocurrency exchange, will learn if they’ve lost their jobs in an email today. Those who have been laid off will be notified on their personal email account, CEO Brian Armstrong said, because their access to the company’s systems will be terminated immediately.
“I realize the removal of access will feel sudden and unexpected, and this is not the experience I wanted for you,” Armstrong said in a letter to staff. “I want to say thank you for giving everything to this company, and I’m sorry. I hope that as we grow again we will have the opportunity to hire you again. We would not be where we are today without your hard work and dedication to our mission. I am incredibly grateful for everything he has done to contribute to our success.”
Nearly 20% of Coinbase staff will lose their jobs, Armstrong said, totaling around 1,100 employees, even after the company embarked on a hiring freeze that resulted in already-issued job offers being rescinded. .
Coinbase’s cuts follow those of smaller competitor BlockFi, whose CEO Zac Prince announced a 20% reduction in staff on Monday, affecting some 170 people. “Like many others in technology, we have been affected by the dramatic change in macroeconomic conditions, which has had a negative impact on our growth rate,” Prince said.
While both companies have been hit by the drastic drop in tech valuations, they are also battling a further collapse in the cryptocurrency industry. After a month of stability following the collapse of “stablecoin” Terra, crypto bank Celsius announced on Sunday that it would suspend customer withdrawals after weeks of fears of insolvency, causing a 25% drop in the price of bitcoin and ethereum.
“Due to extreme market conditions, today we are announcing that Celsius will be pausing all withdrawals, redemptions, and transfers between accounts,” the platform said. “We are taking this action today to put Celsius in a better position to meet its retirement obligations over time.”