Cryptocurrency exchange Coinbase announced to cut 1,100 employees, equivalent to 18% of the current staff, while crypto lending platform BlockFi also laid off up to 20% in the context of the coming “crypto winter” near the.
Prior to that, earlier this year Coinbase planned to hire an additional 2,000 employees for product, system and design positions. However, in the face of the recent massive sell-off in the stock and cryptocurrency markets, the San Francisco-based company has gradually stopped hiring, and eventually laid off employees.
“The company’s personnel costs are too high while the market is volatile,” said CEO Brian Armstrong.
Coinbase’s most recent quarterly business report showed that Coinbase was experiencing a decline in users, resulting in a 27% year-over-year decrease in revenue as the majority of the company’s profits came from transaction fees. With that, the company’s stock is down 79% this year and has lost 85% of its value since its peak.
President and CEO Emilie Choi called it “a difficult decision” but “a prudent thing to do at this time”.
Meanwhile, a wave of hiring freezes and layoffs has also begun at other tech and crypto companies. Cryptocurrency lending platform BlockFi cuts staff by 20%. Crypto.com exchange laid off 260 people, and Gemini also laid off 10% of staff.
Besides cutting employees, companies are also stepping up to reduce spending on marketing activities, eliminate non-essential suppliers, reduce wages and bonuses to “austerity”.
Panic sentiment has spread throughout the crypto market in recent days as the leading currency Bitcoin has repeatedly bottomed and shows no signs of stopping. The entire crypto market was on fire and the market cap fell below $1 trillion, from a peak of $3 trillion in November 2021.
The sell-off even prompted crypto lending platform Celsius to activate an “emergency” provision, stopping all withdrawals and transfers between accounts. Meanwhile, the world’s largest exchange Binance halted Bitcoin withdrawals for several hours due to a “technical error”.
Data from Layoffs.fyi shows that this month alone, more than 5,500 jobs in tech and startups were wiped out.
Vinh Ngo (According to CNBC)