Coinbase Global Inc. is the latest company to plan to end the downturn in crypto. The cryptocurrency exchange announced Tuesday that it plans to cut nearly 1,100 jobs or 18% of its workforce.
JUST IN: #Coinbase will lay off around 18% of its workforce, about 1000 employees.
— Watcher.Guru (@WatcherGuru) June 14, 2022
Extreme volatility has hit the cryptocurrency market as investors abandon riskier assets in fear that rising inflation readings will cause the US Federal Reserve to raise interest rates more aggressively and push the economy into recession.
Brian Armstrong, Chief Executive Officer, stated in a blog post and informed people that it looks like we’re entering a recession after more than 10 years of economic boom. Due to this, the chances of a recession in the market are very high, and according to experts, it can go on without stopping for many years.
Bitcoin, the largest cryptocurrency in the world, dropped as high as 14%. On Monday, Celsius Network, a cryptocurrency lender also stopped withdrawals and transfers.
Coinbase said earlier this month that it would increase its hiring freeze and cancel some job offers that had already been accepted because of the current state of the economy.
The shares of the company dropped about 5% during early trading. Experts say that due to this, there is a possibility of a fall of about 80 percent in all the stocks this year.
#Coinbase is firing 18% of its employees due to falling #crypto prices and #recession. This is likely just the first round of layoffs, and a harbinger of many more to come throughout the crypto ecosystem and beyond. Without jobs many #HODLers may be forced to sell their #Bitcoin.
— Peter Schiff (@PeterSchiff) June 14, 2022
Due to the crypto market slump, companies like BlockFi and Crypto.com have had to lay off hundreds of employees, while Intel Corp and Meta Platforms have had to halt hiring.
Coinbase was able to accelerate hiring during the pandemic. Headcount grew nearly fourfold in five quarters. Coinbase expects to spend between $40 million and $45 million on restructuring costs in total, most of which will go to paying out severance benefits to employees who are leaving.