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Coinbase to lay off about 18% of employees

The American bitcoin exchange Coinbase will reduce the staff by about 18% due to the onset of the crypto winter.

1/ Today I shared that I’ve made the difficult decision to reduce the size of our team at Coinbase by about 18%. The broader market downturn means that we need to be more mindful of costs as we head into a potential recession.
— Brian Armstrong — barmstrong.eth (@brian_armstrong) June 14, 2022

Co-founder and CEO Brian Armstrong called it a “difficult decision.”

“A larger market downturn means we need to be more cost-conscious as we move closer to a potential recession,” he wrote.

Armstrong noted that over the past 18 months, the company’s staff has more than quadrupled. Growth too quickly led to problems coordinating and integrating new team members, making the team less efficient.

The company will notify the employees affected by the reduction in personal messages. They will immediately be denied access to confidential customer information.

“I understand that the removal of access will be unexpected and sudden, and this is not the experience that I desired for you. […] Unfortunately, it was the only practical choice to ensure that no one makes a rash decision that harms the business or it,” Armstrong explained.

For laid-off workers, the exchange will pay compensation in the amount of 14 weeks of salary with bonuses for working more than one year. Coinbase will also pay for 4 months of medical insurance and will assist in further employment, including in portfolio companies of the venture division.

3/ We’ve put some key programs in place to try and minimize the impact to our affected employees. Here is a note that I sent to the company earlier today with more information:
— Brian Armstrong — barmstrong.eth (@brian_armstrong) June 14, 2022

According to CNBC, Coinbase has about 5,000 full-time employees. The layoffs will affect approximately 1,100 of them.

Earlier, Gemini management, CEO Chris Marszalek, as well as BlockFi co-founders Zach Prince and Flory Marquez announced upcoming cuts in their companies.

The head of Binance, Changpeng Zhao, on the contrary, said that the crypto winter is the right time to expand the staff.

Ripple CEO Brad Garlinghouse noted that the firm is facing a downturn in the market with “significant cash balances” that will allow it to hire new employees.

4/ Paying attention – what’s happening now is not a small market gyration. We’ve been preparing for this w/ a significant cash balance, and thus can afford to keep hiring the best talent w/ the goal of 50% outside the US.
— Brad Garlinghouse (@bgarlinghouse) June 13, 2022

“In the near future, the market is likely to decline. But I and many others are confident that cryptocurrencies will become an integral part of global financial systems in the future. You go quieter – you will continue, ”he emphasized.

According to Garlinghouse, Ripple has experienced several bearish market cycles in its history and “will do it again.”

Coinbase shares after the opening of trading collapsed by almost 6% relative to the closing price. The shares are trading at around $49.

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