Coinbase CEO Brian Armstrong said today that the company will reduce its workforce by 18% — nearly 1,100 people — to "stay healthy during this economic downturn."
The crypto exchange, which went public last year with share prices touching the $350 mark, has lost momentum and is trading at nearly $52 per share with a market cap of under $12 billion at the time of writing.
In a blog post, Armstrong said he has had multiple conversations with his management team over the last month to arrive at this decision. He said that rapidly changing economic conditions, managing costs in down markets and the company growing "too quickly" were the primary reason for these layoffs.
Because of almost 4x growth in the last 18 months, the company's employee costs skyrocketed, and they were "too high to effectively manage this uncertain market."
"In the next hour, every employee will receive an email from HR informing if you are affected or unaffected by this layoff. Every affected employee will receive an invitation to have a direct conversation with your HRBP and the senior leader of your organization," he said in the blog post.
"If you are affected, you will receive this notification in your personal email, because we made the decision to cut access to Coinbase systems for affected employees. I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you."
Armstrong said the decision to sever ties with employees in this way was to protect the sensitive customer data stored by the company.
The blog post noted that laid-off employees will get a minimum of 14 weeks of severance, and an additional two weeks for every year of employment.
What's more, the U.S.-based affected employees will get four months of COBRA health support, and global employees will get mental health support.
Last month, the company announced that because of the volatile market, it's scrapping its original plan of increasing its workforce by threefold. Earlier this month, the cryptocurrency exchange said that it'll continue with its hiring freeze, and will retract some of the offers to people who haven't started working.
Coinbase joins a string of tech companies — including Robinhood, Netflix and crypto platform Gemini — that have laid off a big chunk of their workforces. A report from Layoffs.fyi suggested more than 16,000 employees were given a pink slip in May.