The world’s largest cryptocurrency exchange, Coinbase Global Inc has decided to slash the company workforce by 18% due to the Crypto crash. As per the announcement made yesterday, about 1,100 people currently working in the exchange company will lose their jobs. As the crypto market is under a great state of disturbance, Coinbase is compelled to take the bitter decision.
The CEO and Co-founder of the company Brian Armstrong acknowledged the Coinbase community and media through his blog post about the latest decision. The resolution has been made in the best interest of the company’s health “during this economic downturn”, says Armstrong.
However, Coinbase will not leave its employees in the middle of the upcoming recession period. The organization has decided to provide the affected employees with health insurance in the United States and some months of mental health support. Along with this, they have promised the affected employees to find jobs for them within the company’s network. Moreover, it has frozen the hiring process and has denied the accepted offers.
Reasons behind the ‘Difficult Decision’
Armstrong pointed out three key reasons behind the major difficult step. According to him, the very first reason is the changing economic conditions. The economic conditions will be experiencing a recession after 10+ years of booming growth. This recession could lead to another state of crypto winter. The trading revenue is dropping and it’s hard to predict the market now.
Secondly, Coinbae has survived many major economic turmoils. It has carefully managed its costs and spending till time. The company realizes its responsibility towards the huge workforce in this down market and therefore it is high time to manage its costs again. Lastly, Coinbase accepts that they did over-hiring last year. At the beginning of 2021, Coinbase was having 1,250 employees. With fast-growing crypto products and tools and the changing market, they did not realize that they were hiring speedily and unknowingly.
Henceforth, the jury of Coinbase came to a mutual decision to cut the costs and spending. And the first main decision they took was to cut the workforce. Another goal has been set i.e. to increase the efficiency. With the limited employees, the company must perform well with high productivity. According to Brian, the latest decision will make the organization more efficient and productive.
The Crypto Crashing Market
The global market capitalization has shrunk to $977 billion from $1 trillion. In a span of a few days, it has fallen 12%. Currently, every top-ranking coin is running worth half or even less than their all-time high values.
According to Blockcrunch.co Coin Heat Map, every coin is bleeding red. The Bitcoin (BTC) is trending at $21k, whereas Ethereum’s Ether (ETH) has fallen below $1,200. Even Binance native token BNB has fallen to 42% from its last year’s high value.
Just like Coinbase, many other crypto industries BlockFi and Crypto.com are forced to slash their human workforce. Further to this, top-performing organizations like Meta Platforms and Intel Corp have halted their hirings for an indefinite period.