Cryptocurrency exchange Coinbase (Nasdaq:COIN) is laying off 18% of its workforce, or 1,100 employees.
The San Francisco-based company has an office in downtown Portland. It was unclear how many Portland employees are affected and what the future plans for the office are. The company declined comment beyond the initial layoff announcement and accompanying securities filings.
In a memo to staff — who would find out if they were affected by receiving the message to their personal email and not corporate one because their corporate access was cut off — CEO Brian Armstrong said the move was made to reduce spending ahead of a changing economy.
“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” Armstrong wrote.
He went on to say the company grew too quickly and had become inefficient. The company had about 5,000 employees.
In 2018, Coinbase opened an office in downtown Portland with plans to hire 100 people to start with in customer support, finance, compliance, IT and human resources. In subsequent years the company grew aggressively across its footprint.
However, things appeared to change earlier this year. The San Francisco Business Times reported in May the company had pulled back on its hiring.
As an exchange Coinbase makes money on trading. Its own shares have been hit hard, down 79% this year, according to CNBC and down 85% from their peak. This comes as cryptocurrencies are dropping. Bitcoin is down more than 50% trading below $23,000, according to Markets Insider. Over the weekend, decentralized finance startup Celsius Network, which allowed customers to deposit their crypto for lending and then earn high yields, essentially had a run on the bank and froze customer withdrawals.
Laid-off Coinbase employees are receiving 14 weeks severance plus two weeks for every year of employment beyond one year; four months COBRA health insurance in the U.S. and four months of mental health coverage globally; access to Coinbase resources to connect them to other opportunities within Coinbase Ventures or other crypto venture funds.
“Coinbase employees are among the most talented in the world, and I am certain that the skills you all possess will continue to be sought after by companies around the world. I realize it may take longer in this environment to find new employment, and so my hope is that this financial and non-financial assistance helps make this unexpected transition for you as seamless as possible,” Armstrong wrote.
