A message from Coinbase co-founder and CEO Brian Armstrong was shared on his Medium blog today, addressed to his team of employees and where he talks about the current situation of the company.
The message mention from the beginning that have made “the difficult decision” to reduce their employee size by 18%, approximately, in order to maintain itself during the economic recession of the current market. The CEO mentions that by the beginning of 2021, the Coinbase team had more than 1,200 employees.
It seems that we are entering a recession after an economic boom of more than 10 years. A recession could lead to another crypto winter and could last for an extended period.
Brian Armstrong, CEO and co-founder of Coinbase.
The businessman added that this decision was made due to the need to manage expenses and the need to increase the efficiency of cryptocurrency exchange.
The co-founder mentioned that, as they operate in this highly uncertain period of the market, the team of Coinbase wants to ensure that they will be able to successfully navigate a prolonged recession. He adds that the team has grown rapidly and its employee costs are too high to be managed effectively.
The businessman also mentioned that they have exceeded the limit of how many new employees they can integrate and, during the last few months, they noticed that hiring new staff has not made them more efficient. It indicates that they have been considerably delayed due to lack of coordination and the difficulty in integrating new team members.
Armstrong added that in the next few hours all Coinbase employees will receive an email from Human Resources where they will be informed if they will be affected or not by this dismissal of personnel.
Coinbase isn’t the only company downsizing
Not only Coinbase has announced that they will cut their staff. The financial services platform known as BlokFi published an article on its official blog where they discussed a recent reduction of 20% of its employees due to macroeconomic conditions. The post, shared on Monday, June 13, was written by the platform’s founders, Zac Prince and Flori Márquez.
The publication indicates that recent layoffs will affect all teams in the company. He added that the “dramatic pullback in the stock and crypto markets” is to blame for forcing BlokFi to “review [sus] strategic priorities.
The layoffs are expected to help the company weather “what many expect to be a prolonged global recession,” the post said. He adds that, among other steps, BlokFi has decided to ensure profitability including reducing marketing spend, eliminating non-critical vendors, reducing executive compensation and slowing headcount growth.
The BlokFi platform supports more than 650,000 customers worldwide and grew from 150 employees at the end of 2020 to more than 850 employees today, the publication indicates. They add that they hope the layoffs reduce the team to just over 600 employees.
Coinbase and BlokFi join the list
Lately, reports of downsizing in cryptocurrency companies have increased, as reported by CriptoNoticias. Among the most notorious are Gemini and Bitmex, digital asset service platforms, and the Tesla company, which, according to a ad of its CEO, Elon Musk, have “negative sentiment” about the economy and will need to cut payroll by 10%.
These ads match The report that they shared last Friday, June 3, about the “evolution of employment in the United States”, which did not reveal significant changes in the unemployment rate of 3.5%. The number of unemployed in the country remains at 6 million people, according to the report.