Coinbase cuts roughly 1,100 jobs amid fears of a 'crypto winter'

This comes as the rest of the crypto industry is reeling.

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Jon Fingas
June 14, 2022 11:08 AM
YICHANG, CHINA - JUNE 14, 2022 - Netizens display physical commemorative bitcoin coins in Yichang, Central China's Hubei province, June 14, 2022. The world's largest cryptocurrency exchange, Binance, temporarily suspended withdrawals from its platform as the sell-off of risky assets intensified, while The largest cryptocurrency exchange, Binance, temporarily suspended withdrawals from its platform, said Celsius Network. It fell below $23,000 for the first time in a year and a half to its lowest level in 18 months. Shares of cryptocurrency trading platform Coinbase fell 11.41 percent to $52.01 on Monday. (Photo credit should read CFOTO/Future Publishing via Getty Images)
CFOTO/Future Publishing via Getty Images

Coinbase is still struggling with a worsening cryptocurrency market. The exchange has announced that it's laying off 18 percent of its workforce, or about 1,100 jobs, to help weather difficult economic conditions. There's a "crypto winter," according to company chief Brian Armstrong, and the move is purportedly necessary to keep costs down during this dark period.

Armstrong also saw this as a response to excessive optimism about crypto's future. Coinbase felt it had to grow rapidly in 2021 to compete across numerous sectors and take advantage of crypto's value surge, but it's now apparent the company "over-hired" while the market was strong. The exchange started 2021 with 1,250 employees, and will still have roughly 5,000 people employed by the end of the current quarter.

The layoffs have been abrupt. Coinbase cut affected employees' system access at the same time as the announcement to prevent "rash decision[s]" by outgoing staff. The firm is promising at least 14 weeks of severance pay, four months of US health insurance and help finding new work, but the decision comes after multiple attempts to avoid cutting jobs. Coinbase first paused hiring, and later rescinded accepted job offers as economic conditions soured.

Coinbase isn't alone in dealing with the effects of crypto's collapse. Binance is facing a lawsuit over the failed TerraUSD stablecoin, while major lender Celsius has frozen withdrawals to help stabilize assets and honor obligations. The plunge in Bitcoin prices following Celsius' move led Binance to halt its own withdrawals for several hours. Crypto is very fragile at the moment, and it doesn't take much for the technology's largest supporters to suffer.

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