Coinbase will cut 18% of its full-time jobs amid a collapse in its stock and crypto prices.
According to an email sent to employees Tuesday morning, the cryptocurrency exchange platform is preparing for a “crypto winter” and a possible recession. Shares of Coinbase were down about 5.4% early Tuesday trading. The company’s stock is down 79% this year and 85% from the all-time high.
“We appear to be entering a recession after a 10-plus year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” CEO Brian Armstrong wrote in the mail. “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.”
News came a day after cryptos plunged and investors are moving away from high-risk assets. Over the weekend Bitcoin dropped 14% and the crypto market lost almost $200 billion.
In the letter Armstrong said the company grew “too quickly” during a bull market and that past crypto winters have resulted in a significant decline in trading activity.
Earlier this year, Coinbase said it planned to add 2,000 jobs.
In a Senate hearing last month, Treasury Secretary Janet Yellen said her department was due to release a report on the risks of cryptos.