On the same day that rival crypto exchange Gemini confirmed layoffs, Coinbase announced today that it would continue its hiring freeze in a struggling market. In addition, the company will rescind certain job offers for employees who had accepted positions but had not yet started work.
Coinbase first announced plans in May to slow down hiring, but today’s blog post from Coinbase Chief of Staff LJ Brock confirms that the company will take a tougher turn.
“As these discussions evolved, it became clear that we need to take stronger measures to slow our membership growth.“, Brock wrote. “Adapting quickly and acting now will help us successfully navigate this macro environment and emerge even stronger, enabling further healthy growth and innovation.”
According to Brock, the freeze will include not only new unfilled positions, but also the backfilling renewals of positions in the company. There is an exception for “roles that are necessary to meet the high standards we have set for safety and compliance, or to support other mission-critical work.”
Additionally, Coinbase will withdraw some accepted offers for incoming employees who have not yet started.
Brock wrote that this is “not a decision we take lightly“, but that Coinbase considers it to be “necessary to ensure that we only grow in the highest priority areas.“The firm said there will be limited exceptions and everyone affected will be notified today.
Mr Brock added that this decision “is not a reflection on the very talented people we have made job offers to” and that the company will offer severance benefits to people whose offers have been rescinded and help them find jobs elsewhere in the sector.
In May, Coinbase posted a loss of $430 million for the first quarter of 2022. Coinbase’s share price is down more than 40% in the past month alone to a current price of less than $74 per month. stock.
“We always knew crypto would be volatile, but this volatility alongside broader economic factors could test the business, and us personally, in new ways,” Brock wrote today. “If we are flexible and resilient, and stay focused on the long term, Coinbase will come out stronger.”
Gemini announced this morning that it will be laying off 10% of its staff to prepare for a “crypto winter” coming. In late April, crypto and stock trading app Robinhood laid off 9% of its staff due to slowing growth. Cryptocurrency markets have seen extreme volatility in recent weeks, with the price of the main cryptocurrency, bitcoin, dropping 21% in the past 30 days.