Coinbase Global announced Tuesday it will lay off 18% of its workforce in another sign of a worsening crypto downturn that’s shaved off hundreds of millions of the total cryptocurrency market value.
The US’s biggest crypto exchange is following in the footsteps of other cryptocurrency-related businesses that have recently cut staff, including rival exchange Gemini Trust and lender BlockFi, both of which cited the arrival of a crypto winter — a prolonged downturn — as the reason for the layoffs.
Coinbase had hired aggressively in recent years, with its workforce ballooning by about 1,200 employees this year. The company plans to lay off roughly that amount, ending the current quarter with about 5,000 employees. Until recently, the company didn’t acknowledge the arrival of a crypto winter, even though its shares have been dropping since it went public more than a year ago. They are down nearly 80% year to date, according to Bloomberg data.
Laid off employees will receive a minimum of 3.5 months of severance, plus two weeks for every year of employment.
The cryptocurrency downturn began soon after Bitcoin hit its all-time-high in November. Earlier this year, the collapse of the TerraUSD stablecoin and related Luna token erased billions of market gains. In the past week, coin prices plunged after crypto lender Celsius Network froze withdrawals amidst what many suspect was a bank-run-like event.
© 2022 Bloomberg