For the second time this year, publicly traded crypto exchange Coinbase Global Inc has let go of a fraction of its workforce due to the market crash. This time, the exchange is laying off over 60 employees from its recruiting and institutional onboarding team. The announcement was made by the platform on November 10.
These recent layoffs follow after the exchange axed 1,100 employees representing 18% of its workforce five months ago in preparation for an extended crypto winter. Before that, the exchange suspended its earlier plans to hire new staff. This was done to ensure it was well-positioned to succeed during and after the market downturn.
At the time, CEO Brian Armstrong admitted the exchange had gone on a premature hiring spree in early 2021 and had to make adjustments in light of current realities.
Interestingly, Brian has predicted that the crypto winter will persist much longer. Back in August, he said the bear market should only last for 18 months before prices of digital assets enter a recovery phase.
Unfortunately, the market conditions have been made worse by the recent troubles of FTX. The sudden fall of FTX which is now beyond saving has further sunk the value of cryptocurrencies.
Recently, while expressing sympathy for everyone engaged with FTX, especially consumers who may have lost money, Brian said Coinbase isn’t affected by the FTX fallout. However, the exchange derives up to 90% of its revenue from transaction fees, which is higher than the industry average, and in a bear market, this business model is obviously struggling.
The platform in its third quarter report posted a net loss of $545 million which is a sharp contrast to the $406 million in profit it recorded in the same period in 2021.
Crypto Firms Continue Reducing Headcount
Inevitably, the harsh bites of the protracted bear market have forced many crypto firms to slash a sizable number of their workforce to keep afloat and continue operations.
Although November is barely two weeks old, NFT giants Dapper Labs, digital asset payment platform Stripe Inc and Facebook’s parent company Meta have all announced job cuts in response to the crypto market realities.