Coinbase CEO Brian Armstrong announced publicly Tuesday morning that he had made the “difficult decision” to lay off 1,100 employees—or roughly 18 percent of the company’s workforce—in order to withstand the economic turmoil affecting the cryptocurrency markets and broader tech industry.
But in his note, first shared internally, Armstrong said that affected employees would receive news of the layoff in their personal email inbox, as the company had already “cut access to Coinbase systems for affected employees” to avoid leaks.
Have you worked at Coinbase? We want to hear from you. From a non-work device, contact our reporter at email@example.com or via Signal at 310-614-3752 for extra security.
“I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you,” Armstrong wrote in his note. “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’s animosity for internal leakers has long been clear. Last week, after a purported Coinbase employee published an anonymous blog post taking issue with the company’s decision and calling for the dismissal of multiple senior executives, the CEO lashed out on Twitter, saying that he would fire whoever wrote it if he found out. “Quit and find a company to work at that you believe in!” he added.
While the tech industry has struggled to adjust to the new economic climate, cryptocurrency companies have been hit particularly hard as the price of popular crypto assets like Bitcoin and Ethereum have plunged. The lending firm BlockFi and exchanges like Crypto.com and the Winklevoss-owed Gemini have all also recently announced layoffs, citing market conditions.
Coinbase began the year with plans to triple the size of its staff as it embarked on an ambitious global expansion. But the economic climate quickly turned as the U.S. government attempted to grapple with rising inflation, leading cryptocurrency and tech prices to plummet and Coinbase to scale back its plans after losing more than $400 million in the first quarter and watching its share price fall by 80 percent.
Ahead of the share price hitting its recent bottom, Coinbase executives made a combined $1.2 billion from selling their shares after the company went public last spring, according to the Wall Street Journal. Armstrong alone netted $292 million.
On Tuesday, Armstrong admitted he believes Coinbase “over-hired” as the company attempted to scale globally, saying each new employee made the company “less efficient, not more.” He is now preparing “for the worst” potential outcome, he added.
Ahead of the layoffs, Coinbase had announced a number of additional decisions to prepare for the economic downturn. The company has enacted a hiring freeze for the “foreseeable future” and this month rescinded more than 300 accepted job offers.
This surprised the incoming hires, as the company had reassured people both verbally and over email that their jobs were safe.