Coinbase Global Inc. is extending its hiring freeze in existing and new positions for the near future and has cancelled several accepted offers.
The reasons behind the decision
As per Bloomberg News, the largest cryptocurrency firm in the U.S., in a blog post on Thursday, cited the ongoing prioritization of business and market conditions for this decision. Bitcoin prices have tumbled by more than 55% from the November record high. Other digital coins have also fallen as investors reevaluate this sector, with central banks withdrawing the Covid phase stimulus.
Some analysts on Wall Street have warned that the operating costs of Coinbase Global Inc. are too high. From a mere 1700 employees a year back, the company’s total number of full-time employees has ballooned to 4,948. Hiring led to the company’s operating costs at $1.7 billion in the first quarter, increasing by 9% over the previous quarter.
Surojit Chatterjee, Coinbase Global Inc.’s Chief Product Officer issued a memo on May 17 to the employees saying that the company was increasing the focus on revenue-generating critical products while doubling down on core products. He said that the company was looking for improvements in developers’ productivity.
The announcement of the decision of Coinbase was on the same day when twin billionaires Tyler and Cameron Winklevoss, who runs the crypto firm Gemini Trust Co. told their employees that they plan to slash the workforce by 10%. One of the biggest Middle East cryptocurrency exchanges, Rain Financial Inc., having backing from Silicon Valley said that it was also making cuts and laying off people according to people knowing the matter.
Coinbase has gone from being the most eagerly awaited debut in the stock market to the most spectacular crash in a little more than a year. The company’s market capitalization shrunk by $50 billion since last April’s first-day trading closing price.
Coinbase stock hit an all-time low last month, and even though it recovered somewhat, it is still down by 80% from its debut price. The share price rose to $73.82, up by 7.6% on Thursday, and changed little in post-market trading.
