By Nivedita Balu
(Reuters) – Coinbase Global Inc will cut about 1,100 jobs, or 18% of its workforce, the cryptocurrency exchange said on Tuesday, the latest company preparing to ride out a downturn in the cryptosphere.
The cryptocurrency market has been roiled by extreme volatility as investors dumped risky assets on fears that higher inflation readings would force the U.S. Federal Reserve to turn more aggressive in raising interest rates and tip the economy into a recession.
“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” Chief Executive Officer Brian Armstrong said in a blogpost.
Armstrong said employees would receive an email informing them if they had been affected, without giving further details.
Coinbase had earlier this month said it would extend a hiring freeze and rescind a number of accepted offers to deal with current macroeconomic conditions.
Coinbase had ramped up hiring when the crypto market scaled new highs during the pandemic, growing headcount by nearly four times in just five quarters.
“This level of headcount growth over five quarters was too ambitious, especially given that the company has lived through a crypto winter and knows how regularly volatile this market can be,” KBW analyst Kyle Voigt said in a note to clients on Monday.
Coinbase expects to incur about $40 million to $45 million in total restructuring expenses, largely related to employee severance and other termination benefits.
(Reporting by Nivedita Balu and Chavi Mehta in Bengaluru; Editing by Amy Caren Daniel and Sriraj Kalluvila)