- Coinbase announced on Tuesday it plans to lay off 18% of its total workforce.
- The round of layoffs comes amid a historic crypto crash that has left traders scrambling.
- The cryptocurrency platform is one of several tech companies to begin a series of sweeping layoffs.
Coinbase, one of the world's largest cryptocurrency exchanges, announced in a regulatory filing on Tuesday that it plans to lay off about 1,100 employees or about 18% of its total workforce.
The cryptocurrency platform said its workforce will be reduced to about 5,000 workers by the end of the second quarter of 2022. Earlier this month, the company began rescinding job offers via a mass email to employment candidates.
The news comes nearly a month after the cryptocurrency market began to plummet. Bitcoin has slid for nearly 12 straight weeks, dropping from highs near $50,000 to as low as $22,002 as of Tuesday morning. The crypto crash has caused traders to lose about $2 trillion since a peak in November, according to NBC News.
Coinbase stock has dropped about 5% in pre-market trading following the news of more layoffs at the company. The company is one of several tech ventures to initiate a series of sweeping layoffs in the US as CEOs and economists warn of an impending recession amid soaring inflation.
Coinbase CEO Brian Armstrong said the decision was made as the result of concerns related to an impending recession that could lead to another crypto winter. Armstrong said employees will be notified Tuesday morning via an email from HR. Workers who are laid off will receive a minimum of 14 weeks of severance.
He said the company over-hired in the beginning of 2021 and believes a workforce reduction will increase Coinbase's efficiency. Over the past year, the company hired about 3,200 new employees.
"We have now exceeded the limit of how many new employees we can integrate while growing our productivity," Armstrong said. "The actions we are taking today will allow us to more confidently manage through this period even if it is severely prolonged," he added.
The layoffs were announced the same day that JPMorgan downgraded the stock, citing the crypto market sell-off, as well as Coinbase's hiring ramp up in 2022.
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