Coinbase and Crypto.com, two of the largest cryptocurrency exchanges in the world, have announced major layoffs as the market for digital assets continues to tumble. The layoffs come amid recession fears and a prolonged slump for cryptocurrency prices.
Coinbase CEO Brian Armstrong said in a blog post that the company is reducing its workforce by 18%, or about 1,100 employees, as part of its efforts to “stay healthy during this economic downturn”.
He said that the company had grown too fast and its employee costs were too high to cope with the uncertain market conditions. He also warned of a possible “crypto winter” that could last for an extended period.
Crypto.com CEO Kris Marszalek also tweeted that his company is cutting 5% of its corporate staff, or about 260 employees, to ensure “continued and sustainable growth for the long term”. He said that the company had made “difficult and necessary decisions” to optimize its profitability and focus on its roadmap.
The crypto market has been in a steep decline since November 2021, when Bitcoin reached an all-time high of $69,000. Since then, the leading cryptocurrency has lost over two-thirds of its value, dropping below $23,000 on Tuesday. Other cryptocurrencies have also suffered heavy losses, wiping out more than $1 trillion from the market’s total value.
The crypto crash has been driven by a combination of factors, including rising inflation, tightening monetary policy, regulatory uncertainty, geopolitical tensions, and environmental concerns. Many investors have fled from risky assets and sought safer havens amid the economic turmoil.
Both Coinbase and Crypto.com have been among the most prominent players in the crypto industry, with millions of users and billions of dollars in revenue. They have also invested heavily in marketing and expansion, with Crypto.com paying a reported $700 million for the naming rights of the former Staples Center in Los Angeles.
However, their layoffs reflect the challenges and volatility that the crypto sector faces, as well as the need to adapt to changing market conditions and customer demands. Both companies said they will continue to serve their existing customers and pursue their long-term vision of bringing crypto to the mainstream.
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