Coinbase, the world’s second biggest crypto exchange, will slow down hiring because of “market conditions,” after saying it previously wanted to triple the size of the company.
In a public employee note published on Monday Coinbase Chief Operations Officer Emilie Choi wrote that the company would temper hiring and instead focus on integrating the employees it has already hired. The statement comes after a disappointing first quarter earnings report that saw the company fall short of analyst’s revenue estimates.
It’s a stark departure from the company’s earlier goal to triple its headcount, the Coinbase COO wrote on Monday, adding that the hiring slowdown is necessary to reassess how many employees the company actually needs to accomplish its “highest-priority business goals.” Choi also admitted that market conditions played a part in the decision.
In a statement to Fortune, a Coinbase spokesperson said the company had made progress on its goal to triple in size before making the decision to slow hiring, and that the company hired 1,200 employees in the first quarter of the year.
“While we may be slowing down our hiring, we have no intention of slowing our pace of product development or our relentless customer focus,” the company said in a statement.
Last week, crypto prices tanked overall as $200 billion in wealth was erased from the sector in 24 hours. The most popular cryptocurrency, Bitcoin, fell below $30,000, a low not seen since December 2020, and Ether dropped to its lowest level since July 2021. Amid the downturn, a so-called algorithmic stablecoin, TerraUSD (UST), lost its peg to the U.S. dollar and dropped to 13 cents, making its sister cryptocurrency, Luna, nearly worthless, and decimating investors.
Coinbase shares also plunged last week as the company fell short of analyst’s revenue estimates and reported a $430 million loss for the first quarter, its first since going public last year.
On Tuesday, company shares were trading up more than 11% at around $68 partly on the news that it would rein in hiring, although its stock is still far off from the more than $300 a share it was selling for when it first went public last year. The stock surpassed $300 again in November during crypto’s most recent rally.
Aside from its lackluster first quarter earnings, Coinbase also delivered a shock to investors with a disclosure in its first quarter earnings report that said investors could lose all their money if the company declared bankruptcy. CEO Brian Armstrong later said in a tweet that the disclosure was required by the Securities and Exchange Commission, adding that the company has “no risk of bankruptcy.”
Coinbase’s hiring slowdown comes as other large tech companies are reevaluating their hiring practices in light of recent downturns, both in crypto and the stock market.
Twitter CEO Parag Agrawal said in a memo last week that the company would freeze hiring and look to cut costs, Bloomberg reported, while Uber chief executive Dara Khosrowshahi said in an internal note the company would “treat hiring as a privilege.” Meta, Facebook’s parent company, also said earlier this month it would slow or pause hiring for some mid-level and senior positions.
Other companies, like investing platform Robinhood, digital mortgage company Better.com, and Robinhood have resorted to layoffs to cut costs. Robinhood announced in late April that it was letting go of 340 employees, or about 9% of its workforce. Meanwhile the embattled Better.com has laid off more than 3,000 employees.
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