Coinbase, the largest cryptocurrency exchange in the U.S., intends to fire as many as 1,100 employees as part of a major restructuring plan announced earlier today.
The shares of Coinbase have now plunged almost 7% on the news. They are now on track to reach another record low of $48, plunging by a staggering 79% since the start of the year.
The crypto giant has roughly 5,000 full-time employees, which means that its workforce will now shrink by roughly 18%.
The cryptocurrency industry is currently in the middle of a brutal bear market.
CEO Brian Armstrong, who bought a $133 million Bel Air mansion in January, has admitted that the company's extremely fast growth was not sustainable, and the exchange now has to adjust its business to a new environment. Armstrong is expecting the U.S. economy to enter a recession, which may trigger a long-lasting crypto winter.
He adds that the exchange hired too many people during the bull market.While it was "difficult" to make the decision about the dramatic workforce reduction, it was the most "prudent" thing to do, according to chief operating officer Emilie Choi.
That said, the Coinbase COO stressed that the company's financial position was strong enough to "power through" any crypto winter.
The leading American exchange paused hiring and rescinded job offers earlier this month.
Coinbase has joined BlockFi, Gemini and other companies in laying off a large chunk of its employees.
Yet, Ripple recently announced that it would buck the trend by hiring more employees because of sufficient cash reserves.