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Coinbase founder and CEO Brian Armstrong attends the 2019 Consensus 2019 at Hilton Midtown in New York City on May 15, 2019.

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Coinbase is laying off nearly a fifth of its workforce amid a drop in its stock and crypto prices,

Cryptocurrency exchange will cut full-time jobs by 18%, According to an email sent to employees on Tuesday morning. coinbase There are about 5,000 full-time employees, which reduces to about 1,100 people.

Shares of Coinbase were up about 1% before the market opened.

CEO Brian Armstrong pointed to a potential slowdown and the need to manage Coinbase’s burn rate and increase efficiency. He also said that the company grew “very quickly” during the bull run.

Armstrong said, “It looks like we are entering a recession after a 10+ year economic boom. The recession could lead to another crypto winter, and could last an extended period.” There has been a significant drop in trading over the past crypto winter. action. “While it is hard to predict the economy or the markets, we always plan for the worst so that we can operate business through any environment.”

Coinbase initially said it was halting hiring. Two weeks later, the crypto giant announced that it was extending the freeze for “the foreseeable future.” Earlier this year, Coinbase Told It plans to add 2,000 jobs in product, engineering and design.

“Our employee costs to effectively manage this uncertain market are too high,” Armstrong said. “While we did our best to fix this, in this case it is now clear to me that we over-hired.”

The news comes during a dark journey for Coinbase shares. The stock went public via a direct listing last April during a boom in the crypto markets and investors lined up for high-growth tech stocks. Coinbase’s stock is down 79% this year and 85% from an all-time high. Meanwhile, bitcoin fell near $22,000 and lost 53% of its value this year.

San Francisco-based Coinbase reports a drop in users and a 27% drop in its last quarter Downfall in revenue from a year ago. The company makes most of its top line from transaction fees, which are closely linked to trading activity.

Employees of America’s largest cryptocurrency exchange, Coinbase Global Inc., display their listing on the Nasdaq Marketsite Jumbotron in Times Square on April 14, 2021 in New York, US.

Shannon Stapleton | Reuters

President and Chief Operating Officer Emily Choi called it “a very difficult decision for Coinbase,” but given the economic background, she said, “it felt like the most prudent thing to do right now.”

The affected employees got information from HR. If so, the memo was sent to a personal email because Coinbase cut off access to the company system. Armstrong called this the “only practical option”, given the number of employees with access to customer information, and “a way to ensure that not a single person made a hasty decision that harmed the business or themselves.” “

Coinbase employees will have access to a talent hub to find new jobs in the industry, including from Coinbase Ventures’ portfolio companies. Choi said they would still “double down” on areas like safety and compliance and could “redirect” employees to near-term revenue drivers.

“If there are any cuts to new product areas, it will be more around experimental enterprise areas, which we’re still very excited about, but we don’t want to invest in this part of the cycle,” Choi told CNBC. In an interview at the company’s headquarters.

“We will continue to invest in the incredibly innovative areas of crypto that we think are emerging over the long term, but we are probably going to do so in a more measured way in this type of environment.”

Coinbase joins dozens of other tech and crypto companies putting the brakes on hiring. Crypto Lender BlockFi Said It Was Biting 20% of its employees on Monday, Open-source tracker Layoffs.fyi Estimate More than 5,500 start-up and tech jobs have been cut in June alone.

Coinbase intended “this is a one-time event,” Choi said, adding that the company has $6 billion in cash on its balance sheet. The company has previously gone through several bear markets in crypto, also known as “crypto winters”.

“We will power through any macro environment, any crypto winter, or anything to come,” she said. “However the reality is that while we think there is a very dynamic economic environment at play, we have to adjust.”

tech companies have been fighting Their stocks are slammed as morale low and crash. Last week, a petition posted on a decentralized publishing platform called for removal and a “vote of no confidence” regarding several Coinbase executives, including Choi.

Coinbase Brian Armstrong has since drawn attention to the takedown petition, and in a tweet urged employees to leave if they do not believe in the company.

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“We will always encourage our employees to share feedback internally about how we work as a company – and we have a number of mechanisms in place to do so. It is not very clear what this document is about within the company.” came from,” said Choi. “However, if it does, we are disappointed that the people behind it have apparently breached the trust of the company and their coworkers by sharing this information in a way designed to drive controversy rather than in a meaningful dialogue.” felt the need.”

Choi said Coinbase has no plans to offer additional company equity grants or cash compensation amid the drop in price. The company provides annual grants, partly so that employees can “minimize swings” and volatility in crypto. For employees and investors, the COO compared heroine either Tesla: Meanwhile a long term investment with volatility.

“We believe whoever invests, whether it is an employee or an investor, will get good returns over the long term,” Choi said. “Coinbase is a long-term game – we have a very strong belief in the long-term value of the stock.”





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