Fall of cryptos: Coinbase cuts 18% of its workforce

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The American crypto exchange platform announced on Tuesday that it would cut 1,100 jobs.

 Coinbase is suffering from the collapse of the cryptocurrency market as well as the company's "too rapid" growth.

Employment and work

Coinbase will cut 18% of its workforce
Coinbase will cut 18% of its workforce (STRF/STAR MAX/IPx/AP/SIPA)

Published on June 14, 2022 at 05:21 GMT

Updated on June 14, 2022 at 21:30  GMT

Nothing is going well in the crypto sector. Coinbase, the largest American cryptocurrency exchange, announced on Tuesday that it would cut 18% of its workforce. This represents approximately 1,100 positions.

This "difficult decision" was made "to ensure that we stay healthy during this economic downturn," said Brian Armstrong, the company's co-founder and chief executive. "It seems that we are entering a recession after an economic boom of more than 10 years," he said to justify these massive layoffs.

Crypto market crash

For several months, Coinbase, like other players in the cryptocurrency sector, has been facing a market collapse . Weighed down by investors seeking to protect their money, major cryptocurrencies have seen their value plummet. Consequence: the market fell below the 1,000 billion dollar mark, against 3 times more in November.

Also, it is "critical to manage your expenses" as the markets decline, said Brian Armstrong. “A recession could lead to another 'crypto winter' and could last for an extended period of time,” he added. The boss of Coinbase, however, recalled that the platform had already experienced several periods of sharp decline in the value of cryptocurrencies.

In addition, “we have grown too quickly”, advanced the general manager, recalling that the company employed 1,250 people at the start of 2021, against more than 6,000 currently. The group did not change its forecast for the full year but warned that its results would probably appear at the bottom of the range of these forecasts.

Coinbase continues the misadventures

Markets reacted immediately to the platform's announcements. In electronic trading before the opening of the stock market, the group's share price fell by 6.2%, after having already fallen by 11.4% on Monday.

Since the beginning of the year, Coinbase has had a string of disappointments. In late March, the company was targeted by a short seller who viewed the platform as a “[speculative] bubble stock” that was about to take a dive in price. At the beginning of May, it was the NFT exchange platform launched by Coinbase that flopped.

 In mid-May, Coinbase had warned that the number of its active users was falling. The group had also recorded a net loss of $ 430 million in the first quarter.

In addition to the cryptocurrency sector, it is the entire tech sector in the United States that is heavily heckled. Many start-ups have announced layoffs , while giants like Facebook, Amazon or Uber have warned that they will slow down the pace of their recruitment.

With AFP

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