Coinbase to Halt Hiring for 2 Weeks After 70% YTD Share Price Drop

Coinbase Global, one of the largest cryptocurrency exchange companies, will stop hiring new staff for two weeks.

This is one of several measures taken by the crypto exchange to cut costs during the market correction.

As it stands at the moment, the exchange company will put a hold on its initial expansion plan to hire 2,000 new employees.

Some of the other notable changes to be made include trimming the spending on Amazon Web Services and Datadog, as well as reducing gas fees for validating crypto transactions.

“We’re slowing hiring so we can reprioritize our hiring needs against our highest-priority business goals,” said Emilie Choi.

The report adds that the company’s new plan code-named “Plutus” will turn Coinbase’s focus on driving more revenue in “highest-impact” products, as well as working on international expansion.

There is no doubt Coinbase’s decision was made as a direct response to the market’s $1 trillion meltdown, which was also mentioned in a note written by Choi.

“Market downturns can feel scary … we plan for all market scenarios, and now we are starting to put some of those plans into practice,” Choi said.

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Weak Q1 Performance

The first-quarter earnings report is another big factor that likely influenced Coinbase’s new plan to try and lower costs to the business and help increase profits.

Coinbase reported $1.17 billion in revenue for Q1, failing to meet the analysts’ average estimate of $1.5 billion, according to FactSet. That’s a $430 million fall off compared to $840 million in earnings in the fourth quarter of 2021.

The first-quarter report also shows that the company added over 3,200 net new employees since 2021 and that its shares have fallen more than 70% during 2022.

Coinbase shares are down more than 80% since the blockbuster IPO debut in April last year.

Not Everyone is Slowing Down

According to a recent survey by LinkedIn, crypto hiring was up 73% from 2019 to 2021, while the number of hires in traditional finance was down 1% over that period.

Michael Bucella, a general partner at crypto-asset investment firm BlockTower Capital, said that traditional financial institutions and Big Tech have been fighting for talent for more than a decade.

However, things changed with the rapid emergence of digital currencies and those industries are now battling against crypto, decentralized finance (DeFi), and Web3.

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Cryptoassets are a highly volatile unregulated investment product.