Coinbase, the largest U.S. based crypto exchange, said it would be reducing its workforce by 18%, laying off approximately 1,100 employees after volatile crypto markets have lost more than $2 trillion in value since 2021.
In a Tuesday morning blog post, Coinbase CEO Brian Armstrong announced the decision and warned of a recession and a looming crypto winter.
“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” Armstrong wrote. “In past crypto winters, trading revenue (our largest revenue source) has declined significantly. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”
Armstrong also appeared to take responsibility for business mistakes that led to such massive layoffs at his company.
“We also grew quite quickly over the past two years and have begun to operate less efficiently at our new size. It will take us some time to adjust to this new scale before growing again,” he wrote.
The company expects to have approximately 5,000 employees by June 30 and incur $40 million to $45 million in restructuring expenses, according to an SEC filing. The company reported 3,730 employees at the end of 2021 and hired 1,200 in the first quarter of 2022, according to its first-quarter earnings.
Just a few days ago, Armstrong had railed against a reportedly employee-generated petition calling for three Coinbase executives to be ousted. The CEO told unhappy employees: “Quit and find a company to work at that you believe in.”
The news of the Coinbase layoffs comes a month after the company announced an initial hiring freeze, scrapping a previous plan to triple its size. Earlier this month the company also rescinded job offers from candidates, some of whom had given up other jobs to work at Coinbase or were depending on the company to sponsor their visa so they could remain in the U.S.
Coinbase is the latest of a number of crypto companies that have recently announced layoffs. Earlier this month Gemini, a crypto exchange backed by billionaire twins Cameron and Tyler Winkelvoss, said it would reduce its workforce by 10%. Crypto.com, the crypto exchange that sponsors the Los Angeles Lakers’ arena, said it would lay off about 260 workers or around 5% of its workforce. On Monday, BlockFi, a platform for lending and trading crypto, said it would cut 20% of its employees.
The current crypto downturn has been brutal for some companies as the market cap for crypto dropped below the $1 trillion mark. Bitcoin, the world’s most popular cryptocurrency entered its 12th straight week of losses, knocking the cryptocurrency to about $22,500, its lowest level since December 2020. Ether, the second-most popular cryptocurrency was trading at about $1,200 on Tuesday morning, its lowest level since January 2021.
This is a breaking story. Please check back for updates.
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.