Coinbase Lets Go 60 Employees Following Crypto Winter
- Coinbase has laid off close to 60 employees following the collapse of crypto exchange FTX under Sam Bankman-Fried and Bitcoin dropping to its 2-year low this past week.
- Armstrong’s exchange reduced its employee count first in June by 18%. It has suspended multiple plans of expansion due to a decrease in crypto trading volume and a reduction in the demand of crypto services.
- Coinbase reported a loss of $1 billion during the second quarter of 2022 and an impermanent loss on its crypto holding as well.
Coinbase, the world’s second biggest crypto exchange, has initiated another lay-off season as it has let go of close to 60 employees due to an increase in the intensity of the crypto winter and the possibility of another price crash for the world’s biggest crypto coin, Bitcoin (BTC), which is already at a 2-year old price. Interestingly, this announcement comes at a time when the collapse of another exchange, FTX, has shook the entire industry.
The collapse of the Sam Bankman-Fried led exchange FTX caused the entire crypto space to panic as it was once the second-biggest crypto exchange, ranked way above Coinbase in terms of market trading volume. However, just around 3 years of the exchange’s existence, it collapsed due to strong liquidity issues and as a result, the exchange based in US and founded by Brian Armstrong, Coinbase, is now the second-biggest exchange after Binance, which is led by Changpeng Zhao.
Additionally, Armstrong’s exchange reduced its employee count by around 60 and has suspended multiple plans of expansion due to a decrease in crypto trading volume and a reduction in the demand of crypto services as well. Following the collapse of Celsius Network, FTX, Voyager Digital, and other major crypto firms along with hedge fund Three Arrows Capital and the Terra ecosystem, investors seem to have lost faith.
According to the statement from Chief Financial Officer of Coinbase, Alesia Haas, the company might lay off more employees in the near future if the conditions remain the same the economic stated of the company doesn’t turn strong. Furthermore, as per a report from The Information, Haas stated that the layoffs were necessary amendments and described them as “surgical” actions that aim to reduce costs during challenging times.
“If we see that there is going to be further depressed revenue, and if we believe this is going to impact beyond the scenarios we have already planned for, we will have to take further cost-saving action,” she added.
It is crucial to note that Coinbase announced its lay off spree in June when it reduced its workforce by around 18% and since then, many crypto exchange have released their employees including Gemini, Crypto.com, and others. This is because some firms said that they expanded rapidly and were not ready for the oncoming crypto winter.
Coinbase reported a loss of $1 billion during the second quarter of 2022 and also, become the first international cryptocurrency exchange to successfully register with the Dutch Central Bank (De Nederlandsche Bank — DNB).