Amidst a slew of layoffs, the chief policy officer at Coinbase, Faryar Shirzad, admitted that further job cuts could come sometime in the future as part of a long-term plan to “operate the company responsibly.”
Speaking at the Financial Times’ “The Next Web” conference in Amsterdam yesterday, a senior executive at Coinbase announced that more job cuts could be on the cards while noting, “We don’t anticipate it at this time.”
A week ago, the Nasdaq-listed Coinbase Global, Inc. announced a reduction in staff of approximately 1100, according to a disclosure to the SEC. Before that, the company announced the rescission of job offers and a hiring freeze. CEO Brian Armstrong wrote in a company blog post that the decision to cut staffers comes amidst threats of a recession following a boom lasting over ten years. “In past crypto winters, trading revenue (our largest revenue source) has declined significantly,” Armstrong wrote. He also said that one of the ways the company has survived previous crypto winters was to reduce spending.
Being a company whose business leans heavily on consumer trading activities, Coinbase disclosed a $429.7 million loss in May for the first quarter, with its stock price down to $51 from a peak of $429.54, experienced shortly after its initial public offering in 2021. Gemini, BlockFi, Crypto.com, and Robinhood Markets have cut their labor forces.
Coinbase is one of many crypto companies cutting staff
Cryptocurrencies have been battered over the last six months, with bitcoin dropping almost 70% from its peak of around $69K in November last year to below $20K at the time of writing. The broader crypto market has seen over $2 trillion wiped out, with a cumulative market cap of $867 billion at press time.
Coinbase’s staff reduction means that it is one of many cryptocurrency companies which have had to tighten their belts during a difficult month and a half that began with the collapse of the TerraUSD stablecoin, which cost investors $40 billion. Crypto lender Celsius unilaterally froze withdrawals, swaps, and exchanges earlier this month, while another lender Babel Finance halted withdrawals and suspensions on June 17, 2022.
‘Very, very tough environment’
Despite its first-quarter loss, Coinbase is confident it will meet its second-quarter forecasts. While the company is functioning in a “very, very tough environment,” Shirzad said the company did what was in its best interests in the long term.
Speaking about employee sentiment at the company following a recently leaked employee petition criticizing senior executives at the exchange, Shirzad noted, “If people are not happy at the company, they obviously have the option to raise any particular concerns that they have…But also, is it’s not the right fit for them, then, you, know, there are a lot of other places that they can also take their talents.” His statement echoes a tweet from Armstrong, who invited employees with no confidence in the executive team to “Quit and find a company to work at that you believe in.”
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