If in 2021, Coinbase made a sensational entry on the Nasdaq, the cryptocurrency company is disillusioned today and announces the layoff of 1,100 of its employees.
A rather abrupt dismissal, moreover, since the management of the company took the decision to cut off the access of the employees concerned to their mailboxes before publicly formalizing the announced reductions in staff.
Protect sensitive data
In a blog post, Coinbase director Brian Armstrong explains that he opted for this approach in order to limit the risk of sensitive data leaks for the company. “Given the number of employees who have access to sensitive customer information, it was unfortunately the only practical choice, to ensure that no one makes a rash decision that harms the company”, summarizes the leader in a blog post announcing the layoffs.
Coinbase justifies its decision with several other reasons, listed in the blog post. The leader cites the rapid change in economic conditions, but also the fact that Coinbase has hired too heavily over the past year: the company had 1,250 employees at the start of 2021, and recruitment has largely accelerated, increased by the success of cryptocurrencies and the IPO of the company. At the end of 2021, the company had 3,730 employees and recruitment continued into early 2022. Once the workforce reduction is implemented, Coinbase hopes to return to 5,000 employees, according to its filings with the US Securities and Exchange Commission.
In addition to reducing the direct costs related to the salaries of its staff, the leader of Coinbase believes that this influx of new employees within the company has harmed the development of the company by slowing down its activity.
A sector in crisis
Coinbase’s announcement comes as the cryptocurrency industry has been dealing with falling prices for several weeks. The value of bitcoin thus fell below the 20,000 euro mark for a few hours during the morning, a level which had not been reached since 2020.
The sector has also been marked by the recent debacle of Terra/Luna tokens, presented as “stable” crypto-assets by their promoters, but which were not so much so in the end.
Coinbase, founded in 2012, is an American company specializing in cryptocurrencies. It offers both digital wallet services to store users’ cryptoassets, but also a cryptocurrency exchange platform.