Crypto exchanges Coinbase and BlockFi are laying off hundreds of staff members, equivalent to a fifth of their workforces, as they struggle to survive the second wave of the ongoing crypto crash.
Employees at Coinbase, once the flagship US cryptocurrency exchange, will learn whether they have lost their jobs in an email today. Those who have been laid off will be notified on their personal email account, the chief executive, Brian Armstrong, said, because their access to company systems will be terminated immediately.
“I realise that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you,” Armstrong said in a letter to staff. “I want to say thank you for giving everything to this company, and that I am sorry. I hope that as we grow again we get a chance to hire you back. We would not be where we are today without your hard work and dedication to our mission. I am incredibly grateful for everything you have done to contribute to our success.”
Coinbase’s cuts follow on from those of its smaller competitor BlockFi, whose chief executive, Zac Prince, announced a 20% reduction in staff, affecting about 170 people, on Monday. “Like many others in tech, we’ve been impacted by the dramatic shift in macroeconomic conditions, which have had a negative impact on our growth rate,” Prince said.
While both companies have been hit by the dramatic downturn in tech valuations, they are also struggling with a new crash in the crypto industry. After a month of stability following the collapse of the Terra “stablecoin”, the crypto bank Celsius announced on Sunday it was suspending customer withdrawals after weeks of fears of insolvency, prompting a 25% drop in the price of bitcoin and ethereum.
“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, swap, and transfers between accounts,” the platform said. “We are taking this action today to put Celsius in a better position to honour, over time, its withdrawal obligations.”