Coinbase cuts 1,100 jobs amid bear market concerns

U.S.-based cryptocurrency exchange Coinbase last week announced plans to lay off 18% of its employees amid a fall in the digital currency market. 

Coinbase has around 5,000 workers as of June. The latest move means that 1,100 of them will lose their jobs.

The company pointed to a possible economic downturn that might extend the recent bear crypto market. Chief Executive Brian Armstrong said in an open letter last week that the company also grew “too quickly” during a bull market last year.

“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,” he wrote. 

While it was hard to predict the economy or the markets, Armstrong said his company always planned for the worst so it could operate the business through any environment.

“While we tried our best to get this just right, in this case it is now clear to me that we over-hired,” he said.

Since April, prices of crypto currencies have fallen significantly amid a broader slump in stock markets, in particular the technology sector. Bitcoin’s price has dropped to around US$20,000, which is only about 48% of the US$41,000 level earlier this year.

Meanwhile, Coinbase’s stock has also dropped about 80% this year and 85% from the all-time high.