With the ongoing crypto crunch, following the suit of Crypto.com, Coinbase Global Inc. CEO Brian Armstrong also took to Twitter to announce the 18% cut in its workforce, blaming the market turndown and unenforceable economic conditions for the layoff.
This came just after Crypto.com CEO Kris Marszalek announced that his company is laying off roughly 260 employees, about 5% of its staff, blaming the choppy market conditions for their sudden decision.
The recent sharp price declines and a downturn in cryptocurrency trading volumes have rocked some of the industry’s most prominent players.
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Coinbase and Crypto.com’s Sudden Employee Layover – The Backstory
The crypto market fall coupled with increased inflation, supply chain problems, and Russia’s war against Ukraine are the significant reasons for sudden layoffs in the crypto industry.
Coinbase, as announced is slashing its workforce by 1,100 employees which is a fifth of its employees because the company had grown too quickly and there was a potential recession. “Our human costs are too high to manage this uncertain market successfully,” said the letter addressed to employees by Coinbase’s CEO.
“It appears we are entering a recession after a ten-year economic boom. Another crypto winter might occur due to a recession, and it could endure for a long time. Trading revenue (our primary revenue stream) has decreased dramatically in previous crypto winters.” said Armstrong.
He ensured the community and said, “The steps we are taking today will give us more confidence in our ability to get through this period, even if it’s very long.”
Armstrong discussed how after adding staff, the company had become less efficient. He believes that by making changes to the way they are targeting its resources, the company will become more efficient.
Because the business decided to “limit access to Coinbase systems for affected workers,” employees affected by the layoffs will be notified via email. “Given the number of staff with access to sensitive client information, it was, unfortunately, the only practical choice,” Armstrong added.
Crypto.com faced a similar situation of economic loss. After which, Crypto.com CEO Kris Marszalek said they are making cuts in the workforce to ensure their future growth is sustainable. They are giving up 5% of their workforce to ensure we have a future path.
Marszalek announced in a series of tweets on Saturday that our approach is to keep focused on executing against our roadmap while optimising for profitability. “This involves making painful but necessary decisions to achieve long-term ongoing and sustainable growth by reducing our corporate workforce by about 260 people”.
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Cryptocurrencies At An All-Time Low
Bitcoin, the world’s largest cryptocurrency fell to its lowest point since 2020 this Monday. The collapse of the TerraUSD, a stablecoin secured by gold followed by Bitcoin’s drop, caused the cryptocurrency market to lose over $200 billion in one day.
Since Bitcoin reached an all-time high of $67,802.30, the carnage in crypto markets has been far-reaching and deep, with almost two trillion dollars destroyed across various cryptocurrencies.
Most of the Cryptocurrencies are in Red as of Now
While the Federal Reserve struggles to contain the most extraordinary inflation in decades in the United States, investors have continued to sell riskier assets such as cryptocurrency and technology companies. This week, the S&P 500 stock index entered a bear market as investors expect the Federal Reserve to boost interest rates even more.
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As most investors are selling off their crypto assets, it may also be a good time to invest in Cryptos with strong fundamentals such as Ethereum and Chainlink. We suggest following the principle of DYOR and taking decisions accordingly.
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Source: https://insidebitcoins.com/news/crypto-prices-plummet-coinbase-crypto-com-announce-layoffs