Two weeks ago, publicly-listed crypto exchange Coinbase had announced that it was slowing down its hiring process. Now, the company has said that it is going to hit pause for the ‘foreseeable future’. As a matter of fact, it also said that some of the job offers that had already been accepted will also be rescinded. The exchange stated that it would send emails to those who were no longer being hired on Thursday. It went on to say that it would give a severance policy to those individuals and would also assist them with resume review and job placement.
The chief people officer of Coinbase, L.J. Brock published a blogpost on Thursday. He said that they had assessed the priorities of the business, done a headcount and checked open roles. They had come to the decision of hitting pause on the hiring process, as long as requirement by the macro environment. He added that backfills will also be included in the extended hiring pause. The only exception will be positions that are essential for the exchange to meet the high standards it has established in regard to compliance and security, or for other core areas.
The year has not proven to be a good one for Coinbase, or for the crypto market in general. Almost 70% of the exchange’s value has been wiped out because of the sell-off in the market, as well as economic pressure that has caused revenue to shrink and user numbers to decline. Most of the tech sector has experienced this pain, with similar steps being taken by Meta and companies like Robinhood laying off their staff. Before the downturn in the industry this year, Coinbase had been one of the major players in the tech industry. Last year, the company had tripled its workforce to 3,730.
In April 2021, the company was listed on Nasdaq and its sales for the second quarter had increased 12 times to reach $2.28 billion. The company’s profit had increased to $1.6 billion, which marked an increase of almost 4,900%. However, tech firms that had seen massive growth in the previous year have been delivered the hardest blows in this one. With the soaring inflation and increasing interest rates, investors have once more turned to safer assets and become risk averse. Bitcoin’s price has reduced by almost 1/3rd, while Ethereum has seen 50% of its value wiped out.
Therefore, Coinbase has also seen a decline in number of users. Last month, the exchange announced that there was a 27% decline in its revenue in the last quarter, as opposed to a year earlier. As for trading volume, it had been around $547 billion in the last quarter of 2021, but it had reduced to $309 billion in the first quarter this year. Brock said in the post that everyone knew about the volatility of the crypto market, but its combination with other economic factors is testing the firm in new and rather unexpected ways. He said that as long as they stay resilient, they will be able to come out of.