Cryptocurrency exchange Coinbase Global Inc. COIN -0.83% said it is cutting almost a fifth of its staff because the company had grown too quickly and a potential recession “could lead to another crypto winter.”
The company said Tuesday it will reduce its workforce by 1,100 employees, or about 18% of its staff, as part of its efforts to manage operating expenses.
In a letter to all employees, Chief Executive Brian Armstrong said “our employee costs are too high to effectively manage this uncertain market.”
“We appear to be entering a recession after a 10+ year economic boom,” Mr. Armstrong wrote. “A recession could lead to another crypto winter, and could last for an extended period.
The biggest cryptocurrency exchange in the U.S. has struggled to hang onto users this year as the frenzy in digital assets cooled and markets have been rocky.
In May, Coinbase said it lost hundreds of millions of dollars in the first quarter as its trading fees dropped sharply.
Shares of Coinbase traded at $52.18 on Tuesday, up 0.4%, after Coinbase posted the notice of layoffs as part of a Securities and Exchange Commission filing. When Coinbase went public in April of last year, the first trade of its stock was at $381.
Coinbase said it expects to have 5,000 staffers following the layoffs and that laid-off employees will get at least 14 weeks of severance pay.