Coinbase Fires 1,100 Workers, Also company CEO Warns Crypto Industry Crash
On Tuesday, the billionaire CEO of popular crypto-brokerage Coinbase announced that the company would be laying off about 18 percent of its workforce in preparation for a possible recession, joining other tech firms in downsizing staffing levels as stocks and cryptocurrencies plunge deeper into bear market territory.
When the market is falling, it is difficult to make money and you have to shift your thinking. Armstrong, whose net worth Forbes estimates at $2.2 billion, stated on Tuesday that trading income (the company’s major revenue stream) has decreased dramatically during periods of crypto-market downturn in the past and that this might happen again if the economy experiences a recession. If this period is significantly extended, “the actions we are taking today will allow us to more confidently manage through it,” Armstrong said.
After a landmark year for cryptocurrencies, Coinbase went public in April of last year, but the Federal Reserve’s efforts to curb sky-high inflation have deflated asset prices and struck the cryptocurrency industry particularly hard. After crypto lending business Celsius first stoked anxiety by stopping withdrawals owing to “extreme market conditions,” the price of bitcoin dropped about 20 percent to an overnight low of less than $21,000 on Monday. While crypto business BlockFi subsequently said it was cutting off 20% of its workers owing to the adverse market climate, Binance was forced to suspend its exchange due to a backlog issue during the selloff.
From its all-time high of almost $3 trillion in early November and $2 trillion at the beginning of the quarter, the value of the world’s cryptocurrencies has fallen by around 70% to $929 billion. Meanwhile, the Nasdaq, which is heavily weighted toward technology, has fallen by approximately 32% this year.
Armstrong allegedly lashed out last week at staff who responded to a hiring freeze and revoked job offers by starting an online campaign to oust top executives. Armstrong said of the revolt, “This is really dumb on multiple levels.” He said, “If you want to do a vote of no confidence, you should do it on me and not blame the execs.”