The largest American crypto exchange Coinbase wants to drastically reduce its number of employees. It’s about cutting spending to survive a prolonged economic downturn, Coinbase CEO Brian Armstrong said on Tuesday. The online marketplace for digital assets like Bitcoin wants to lay off around 18% of its employees, or around 1,100 employees.
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The crypto exchange simply grew too fast and hired too many people following last year’s hype, Armstrong said. At the start of 2021, Coinbase had only 1,250 employees. Cost discipline is now in order, which has already helped Coinbase survive four “crypto winters” in recent years.
Inflation and recession fears are currently making investors very nervous and have recently put the crypto market under severe pressure. Coinbase shares are down more than a quarter in the last five trading days alone. Crypto exchanges like Coinbase make money by charging fees on transactions involving bitcoins and other digital currencies. When there is a drop in trade, business suffers.
Wave of layoffs also in fintechs
And Coinbase is just the latest in a wave of layoffs in the cryptocurrency space: On Monday, US financial services provider Blockfi announced it would cut its workforce from 850 people to 600. only way to survive in the difficult market environment and achieve the profit targets that have been set. Singapore-based exchange Crypto.com announced layoffs on Friday. According to boss Kris Marszalek, around 5% will be made redundant, or around 260 people. And earlier this month, the US stock exchange Gemini announced that it would part with 10% of the workforce.
There have also been job cuts in Germany: cryptocurrency fintech Nuri, which is currently struggling with withdrawal issues, announced in late May that it would lay off 45 of 200 employees. “The U.S. interest rate reversal, rapidly rising inflation and war in Ukraine are causing uncertainty in the financial market and leading to a change in strategy at Nuri,” Nuri boss Kristina said. Walcker-Mayer, at the Handelsblatt. Now, the focus is no longer on user growth, but on profitability and reduced costs. You can see the same with fintechs like Klarna, Sumup and Kontist, which announced job cuts in May. (With dpa material) /