The giant crypto exchange cited worsening economic conditions and overhiring as the reason it need to cut one in five jobs.
Coinbase, the listed cryptocurrency exchange is set to announce job cuts affecting 18 per cent of its global workforce.
The company, which last year made headlines by becoming the biggest fintech to go public on the stock market in a $100bn direct listing has been hit by the recent tumult in cryptocurrency markets.
Its CEO Brian Armstrong (pictured) said in a blog post that the company grew too quickly in hiring.
In the past year and a half, Coinbase has expanded its headcount by 400 per cent to nearly 5,000 people.
A likely recession in the coming year or so could lead to another crypto winter, and could last for an extended period, Armstrong believes making the need to manage its costs “critical”.
“I am making the difficult decision to reduce the size of our team by about 18 per cent, to ensure we stay healthy during this economic downturn.
Armstrong says it took full “accountability for how we got here. I am the CEO, and the buck stops with me.”
At the beginning of 2021, Coinbase had 1,250 employees. Four months later it was a public listed company basking in a crypto boom as the interest in NFTs, Web3 and the metaverse heralded the next leg of the market for digital assets.
“At the time, we were in the early innings of the bull run and adoption of crypto products was exploding. There were new use cases enabled by crypto getting traction practically every week,” Armstrong said.
“We saw the opportunities but we needed to massively scale our team to be positioned to compete in a broad array of bets. It’s challenging to grow at just the right pace given the scale of our growth…in this case, it is now clear to me that we over-hired,” he added.