Coinbase CEO expects a long crypto winter as the exchange lays off 1100 employees while running an NBA ad to mock pessimists
The CEO of America's largest crypto exchange Coinbase issued a stark warning about the length of the recession he expects the Federal Reserve's decision to dramatically raise interest rates would cause. Announcing a big round of Coinbase staff layoffs, CEO Brian Armstrong argues in a letter to his employees that "a recession could lead to another crypto winter, and could last for an extended period."
"In past crypto winters, trading revenue (our largest revenue source) has declined significantly... our employee costs are too high to effectively manage this uncertain market," he adds. A new batch of 1,100 Coinbase employees would be laid off this time around, or 18% of the company's workforce. One of the employees who was dismissed on Tuesday recounts the experience as follows:
But I said I wasn't going to resign, that I planned to ride out the crypto winter, and that we'd be able to overcome this. Then, this morning, while checking in on one of my direct reports in India, I received a message from a teammate saying the CEO had sent us a message about a company-wide update. But then, before I could even find out what it was, all of sudden, all of my devices were blocked out and I didn't have a chance to check my email. Next, I received a text message from human resources asking to please look at my personal email. The email told me I had been laid off.
The sharp plunge in Bitcoin, Ethereum, or even meme currency like Dogecoin's prices in recent weeks forced many people to exit the crypto market and have brought hard times to the exchanges that depend on trading revenue to survive. The Bitcoin price, in particular, is nearly 70% off its November highs and there could be more pain on the downside, depending on the direction of the general market trend in risky assets.
Adding insult to injury, Coinbase just ran an ad at the NBA finals that mocked the crypto winter pessimists. A spokesperson of the crypto exchange explained that the tone-deaf ad has been a part of a larger media purchase with the NBA that was done months before it aired, even though the ad that you can see below was posted on the Coinbase video channel just three short weeks ago.