Coinbase is laying off 18% of its workforce, or about 1,100 employees, the cryptocurrency exchange CEO and co-founder Brian Armstrong said in a blog post Tuesday. Armstrong's announcement comes just days after Crypto.com CEO Kris Marszalek said that his cryptocurrency exchange is laying off 5% of its corporate workforce, or about 260 employees.
Coinbase employees affected by the layoffs will be notified via their personal emails because the company made the decision to "cut access to Coinbase systems for affected employees."
"Given the number of employees who have access to sensitive customer information, it was unfortunately the only practical choice, to ensure not even a single person made a rash decision that harmed the business or themselves," Armstrong said.
Armstrong said that, along with uncertain economic conditions, Coinbase's aggressive hiring last year contributed to the need to cut staff.
"Our team has grown very quickly ... and our employee costs are too high to effectively manage this uncertain market," Armstrong said. "The actions we are taking today will allow us to more confidently manage through this period even if it is severely prolonged."
He said that adding new employees had made the company less efficient, not more. "We believe the targeted resourcing changes we are making today will allow our organization to become more efficient," he said.
Just days earlier, Crypto.com's Marszalek made a similar announcement.
"Our approach is to stay focused on executing against our roadmap and optimizing for profitability as we do so, " Marszalek said in a series of tweets Saturday. "That means making difficult and necessary decisions to ensure continued and sustainable growth for the long term by making targeted reductions of approximately 260 or 5% of our corporate workforce."
Crypto.com, a Singapore-based exchange, paid a reported $700 million in November for the naming rights of the former Staples Center in Los Angeles. It has also invested heavily in advertising, with a ubiquitous campaign featuring actor Matt Damon.
The companies' layoffs are the latest sign of a downturn in the economy, roiled by high inflation, supply chain problems and Russia's ongoing war against Ukraine.
Bitcoin, the world's largest cryptocurrency, fell to its lowest point since 2020 on Monday. This follows the May collapse of the stablecoin TerraUSD. Its demise caused the cryptocurrency market to lose $200 billion in one day.