Coinbase to Lay Off 18% of Workers

[stompix]

Many companies shrink staff when projects are finished or when growth slows. Tech companies, don't always do this but look for 'a reason' to shrink staffing.

And then it becomes much harder for them to hire a similar quantity of workforce (think the 18% that Coinbase just fired), because it costs even more money to train them to the standards of the previous workforce.

I think most of the layoff had nothing to do with the main business of Coinbase, as an exchange and a custodian for others. This paragraph:

There were new use cases enabled by crypto getting traction practically every week. We saw the opportunities but we needed to massively scale our team to be positioned to compete in a broad array of bets.

makes me think that once they saw millions coming in from each direction, basically everything you sod was making money they've just gone on a hiring spree trying to get a piece of the pie from every possible trend since those turn into fads pretty quick suddenly they realized not everything brings money forever.

Tbh, I really wouldn't overthink them being insolvent and all those kinds of things. It's highly likely that they're expecting lower demand in the future, and they're just taking into consideration the deeper economic risks.

There is no way for them to become insolvent, but it's about time they stick to what they were doing best and profitable even during previous bearish seasons, being a crypto exchange, stop with the Defi and NFT garbage that have turned into money pits for almost everyone.

[Taskford]

Coinbase to Lay Off 18% of Workers as Crypto Winter Worsens

    Biggest US crypto exchange joins Gemini, BlockFi in staff cuts
    Company plans to end current quarter with about 5,000 workers

Coinbase Global Inc. announced Tuesday it will lay off 18% of its workforce in another sign of a worsening crypto downturn that’s shaved off hundreds of millions of the total cryptocurrency market value.

The U.S.’s biggest crypto exchange is following in the footsteps of other cryptocurrency-related businesses that have recently cut staff, including rival exchange Gemini Trust Co. and lender BlockFi Inc., both of which cited the arrival of a crypto winter -- a prolonged downturn -- as the reason for the layoffs.
https://www.bloomberg.com/news/articles/2022-06-14/coinbase-to-lay-off-18-of-workers-as-crypto-downturn-worsens

Cryptocurrency related business are clearly having financial problems now. Although there is some spike in trading volume when there is a high volatility,  the bear market is much worse for exchanges than a bull market.

This is the time to withdrawal all the funds you have on exchanges. They might have financial problems.

Maybe the recent bear market contributes the collapsed of their generated profits that's why they decide to end up the career of some people working with them. We can't blame them to have this decision and maybe they are been really hurt financially by the current events then they cannot able to pay all of them that's why this is part of their cost cutting to minimize the bleed on their own company fundings.

But I hope this will not affect their service because if this make their service especially when we talk costumer service then this might give huge problem to them.

[aysg76]

Laying people off when business isn't doing well is entirely expected as suchmoon has said. However, the circumstances surrounding these lay offs is pretty disgusting, even for Coinbase's already abysmal standards. I'm reading about people who were fired via a text message, people who discovered they were fired when they were simply kicked out of their remote systems while in the middle of working on something, even someone who took out a work visa and had his job offered rescinded, meaning he is being kicked out the country. We know Coinbase have a complete disregard for their customers, but looks like they have a complete disregard for their staff as well.

The employees layoffs during these times is normal but don't think so Coinbase needs this decision at this time as they are expanding their business to different nations and need employees backpack to support them but we all know they are mainly concerned with their profits only and this decision came across by CEO but they will never take a cut in their wages and taking big portion of it :



See how much they are earning through coinbase and involving in all other privacy related breaches and freezing the funds of users.But they see the future economic conditions as concerning and needs to implement this decision.They are making billion dollar revenue each quarter and you can check out the shareholders report

But they are implementing this decision at this time when market is down and they wants to save themselves with recent SEC filings which was important as they declared users funds can be used in case of insolvency so what else can we expect from them that they will not protect anyone's interest.

[KingsDen]

Maybe the recent bear market contributes the collapsed of their generated profits that's why they decide to end up the career of some people working with them. We can't blame them to have this decision and maybe they are been really hurt financially by the current events then they cannot able to pay all of them that's why this is part of their cost cutting to minimize the bleed on their own company fundings.

We understand that the market bear is telling much on exchanges. It is difficult for them to bear. But I personally do not think that laying off staff is the best approach. The economy is bad and one losing job is very critical. How about if a company try talking to staff to take pay cut instead of total dismissal.
If the market returns in the bull direction, they can reverse to initial salary arrangement.

Exchanges are suffering the more because many traders have temporarily stopped and some people are selling their coins off exchanges. But everything will bounce well back.

[Findingnemo]

The beginning of new era, everything is getting automated so companies don't really want to pay for the workers instead of this they want one time investment and get returns forever. I don't really think the bear market affected the exchanges as much as the holders because the trading volume is still there probably they get less money than its peak but on an average I don't think there is much difference in their revenue.

[pooya87]

We understand that the market bear is telling much on exchanges. It is difficult for them to bear. But I personally do not think that laying off staff is the best approach. The economy is bad and one losing job is very critical. How about if a company try talking to staff to take pay cut instead of total dismissal.
If the market returns in the bull direction, they can reverse to initial salary arrangement.

Exchanges are suffering the more because many traders have temporarily stopped and some people are selling their coins off exchanges. But everything will bounce well back.

Coinbase is starting to have a lot of problems because it wasn't just an exchange, they were exposed to bitcoin so when the price went down they started losing money. Otherwise what you said in the last part is wrong because during the big drops (just like the big rises) there is a lot more trades taking place increasing the total daily trading volume on exchanges hence increasing their revenue by a lot.
For example if you look at the daily charts, the 2x 4-day drops that we have show a volume that is about 16 times higher than last month when price was stable close to $40k. So technically the exchange revenue went up 16 times during these times.

[helloinox]

I think most of the layoff had nothing to do with the main business of Coinbase, as an exchange and a custodian for others. This paragraph:

There were new use cases enabled by crypto getting traction practically every week. We saw the opportunities but we needed to massively scale our team to be positioned to compete in a broad array of bets.

makes me think that once they saw millions coming in from each direction, basically everything you sod was making money they've just gone on a hiring spree trying to get a piece of the pie from every possible trend since those turn into fads pretty quick suddenly they realized not everything brings money forever.

It was come from when everyone was layoff from the normal business cause of covid and lockdown. Huge surge in big tech's stock and crypto as well since people use their saving money or money from govt's aid to invest. Those companies booming, starting upscale and hiring everyone leading to this after effect. Now, covid was out of the picture and every traditional business is back to normal, they can't have all the pie for themself anymore.

[o_e_l_e_o]

We can't blame them to have this decision and maybe they are been really hurt financially by the current events then they cannot able to pay all of them that's why this is part of their cost cutting to minimize the bleed on their own company fundings.

I mean, you can absolutely blame them. They massively over expanded to try to get their fingers in to as many pies as possible, assuming that the bitcoin price would only ever continue to go up, which literally anybody who has been here for more than a few months knows is never going to happen. Look at the charts for the past 10 years and it was obvious that at some point the price was going to fall again, and a company as large as Coinbase should have been prepared for that instead of being caught off guard and having to cut a fifth of their workforce with no warning. But Coinbase's leadership aren't exactly renowned for giving a shit about anybody but themselves, so hey, let the workers pay the price for their incompetent management.

and this decision came across by CEO but they will never take a cut in their wages and taking big portion of it

Their base salary is a tiny amount of the money that they take from Coinbase. Armstrong just paid $133 million in cash for a house.

[coin-investor]

This is the time to withdrawal all the funds you have on exchanges. They might have financial problems.

I already did on some of the exchanges except Binance I still believe in Binance's capability in times of trouble, in fact, they are hiring 2000 more employees amidst this market decline, CZ is really the frontline of the exchange industry no wonder they are miles ahead of the competition.

Binance Is Looking to Hire 2,000 Employees Amid the Latest Market Decline

He said, "We have a very healthy war chest; we in fact are expanding hiring right now… If we are in a crypto winter, we will leverage that, we will use that to the max."

[tabas]

Just like the typical company and business if they're having some financial problems with their operation due to the downturn of the market, they have to cut off their expenses and costs including their workers. And it's always not recommended to leave your funds to any exchange despite how strong people trust them. But laying off at these times, I think Coinbase should have done better and instead of laying them off, there should be an alternative solution to this just like what Dan Price did.

[Lucius]

So long as they don't fire the 1 person working for customer support.

I would say that these are the people who will be the first to get fired, because they have the lowest value and priorities for the company, considering that this is something that clients complain about the most. In times of financial crisis, it is easiest to replace people with automated systems that are already widely used in most customer support.

I used to be able to call my ISP and talk to a real person, now it takes at least 5-10 minutes to go through the whole process where the computer decides if it can offer me a solution before I get the opportunity to talk to a real person and then I get a message that I am 8 in the queue. All big companies protect profits without any hesitation to lay off 10% or 20% of people who are just numbers for them.