Where does cryptocurrency fit in our economic picture? (Source: Nigel Sussman)

Crypto Currencies And Their Employees Facing Difficult Times

Along with all the financial issues most Americans are currently dealing with, comes news that many crypto-based companies are reporting significant layoffs of employees. And the latest count from Layoffs.fyi suggested more than 16,000 employees were given a pink slip in May. The companies named in an article by techcrunch.com includes Robinhood, Netflix, and crypto platform Gemini.

Now comes word of another big crypto layoff by Coinbase.

Coinbase CEO Brian Armstrong said today that the company will reduce its workforce by 18% — nearly 1,100 people — to “stay healthy during this economic downturn.”

The crypto exchange, which went public last year with share prices touching the $350 mark, has lost momentum and is trading at nearly $52 per share with a market cap of under $12 billion at the time of writing.

In a blog post, Armstrong said he has had multiple conversations with his management team over the last month to arrive at this decision. He said that rapidly changing economic conditions, managing costs in down markets, and the company growing “too quickly” were the primary reason for these layoffs.

“In the next hour, every employee will receive an email from HR informing if you are affected or unaffected by this layoff. Every affected employee will receive an invitation to have a direct conversation with your HRBP and the senior leader of your organization,” he said in the blog post.

“If you are affected, you will receive this notification in your personal email, because we made the decision to cut access to Coinbase systems for affected employees. I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you.”

With the current state of the economy, due in part to gas prices and supply chain shortages it should really come as no surprise that the crypto industry would suffer as well. But the idea of cryptocurrency was supposed to keep it safe from financial fluctuations. It did not work as well as expected.

And it appears that it is hitting everyone in the industry pretty hard.

Bitcoin is off around 13% in the last 24 hours to $23,436; ETH is off around 15% over the same time frame to $1,219; Solana’s token is off approximately 15% in the last day to $26.75. The three tokens are down roughly 26%, 36%, and 39%, respectively, over the last week.

Investors need to keep their eye on the trend, especially for the remainder of 2022.