Business

Coinbase to increase slow hiring times as users decrease


Coinbase Global Inc.,

COIN 11.30%

The largest cryptocurrency company based in the United States, will reduce its hiring rate amid the crypto market crash.

The announcement was made privately to employees and was followed by a statement from President and CEO Emilie Choi.

Posted on company blog.

By 2022, the company had planned to triple the number of employees, Ms. Choi said, but that goal was shelved. “Given the current market conditions, we feel it is prudent to slow hiring and reassess our head count needs against our highest priority business goals,” she wrote.

The statement did not provide further details on the action. The company hired 1,200 people in the first quarter, according to its latest earnings report. It has 3,730 employees at the end of 2021. Leading to 2022,

Coinbase

COIN 11.30%

Ms. Choi said there were plans to triple the workforce.

Chief communications officer Elliott Suthers said the company has no plans to slow the pace of its product development in a statement to The Wall Street Journal. The company will focus on integrating new employees with existing teams, he said, focusing on existing plans and especially expanding internationally.

Last week, amid a severe sell-off in the crypto market, Coinbase surprised investors by announced a loss for the first quarter of $430 million, or $1.98 a share. It reported that the number of active users fell during the quarter, a headwind as the company gets almost all of its revenue from transaction fees. The company also said it expected user numbers to decline in the second quarter.

Shares are down about 74% this year and about 82% from their November record of $357.

News of Tuesday’s hiring drop actually bolstered the stock. Coinbase shares were up about 12.4% in midday trading.

The markets have been looking increasingly shaky lately: Stocks, bonds, and cryptocurrencies are all falling as investors struggle to manage volatile global financial markets. WSJ’s Caitlin McCabe looks at some of the reasons behind the recent market frenzy. Photo: Spencer Platt / Getty Images

Coinbase’s announcement is the latest example of how the price drop affects companies in the sector, a pattern that is also evident. during the past “crypto winter”.

The cryptocurrency market relies heavily on momentum trading and speculative enthusiasm. That enthusiasm was supply shortages this year across markets. As the Federal Reserve raised interest rates, investors moved away from the riskiest assets.

Coinbase, which just marked its 10th anniversary in 2012, is one of the most prominent crypto companies and the first major player in the industry to go public, which they did last year. .

Initially, the company was very profitable. For the first three quarters as a public company, it posted an aggregate profit of $2.8 billion. That has helped the company build a current cash surplus of about $6 billion.

However, this year has been a different story. The crypto markets have suffered a severe drop amid the growing sell-off in the capital markets. That sell-off ruined a lot of the trading activity that companies like Coinbase rely on for revenue.

The price of bitcoin, the first and largest cryptocurrency, down 56% from November record. Despite the historical volatility, the asset has only had four larger sell-offs, according to research firm Visual Capitalist.

Coinbase is certainly not alone in its struggles. Countless companies across the economy is cutting staff As interest rates rise, the stock market falls and economic concerns grow.

Shares of other publicly traded crypto companies fell sharply This year.

Silvergate Capital Corp.

50% off in the year to date,

Marathon Digital Holdings Inc.

fell by 67%, and

TeraWulf Inc.

lost 77%.

MicroStrategy Inc.,

a software company that became a major holder of bitcoin, down 61%.

Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8



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