Crypto exchange Coinbase will lay off 18 per cent of its workforce as it warned of a recession and a crypto winter.
Coinbase CEO Brian Armstrong said the decision was based on the need to manage expenses and increase efficiency as the company looked to “stay healthy during this economic downturn”.
“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” Armstrong said in a statement on the Coinbase website. “Managing our costs is critical in down markets.”
The news comes as the crypto market faces a severe rout, with prices of major tokens plummeting. Bitcoin dropped 2.67 per cent on Tuesday to $22,527.50 after reaching a record high of near $69,000 in November last year.
Investors have been cautious about crypto as soaring global inflation and recession fears sparked a scramble away from risky assets to steadier investments. The collapse of tokens Terra and Luna last month also spurred a sharp sell-off in the crypto market.
Armstrong took full responsibility for the decision to lay off employees. He said that Coinbase had grown too quickly since 2021 and hired too many people.
“Our employee costs are too high to effectively manage this uncertain market.”
Affected employees will have access to Coinbase systems removed to prevent misuse of sensitive information.