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The announcement comes just two weeks after Coinbase launched an initiative to cut down on spending in an effort to grow revenue. As its Q1 2022 results have shown, the exchange incurred a net loss of $430 million in its first-quarter earnings as well as saw its stock plunging.
On Thursday, one of the leading crypto exchanges Coinbase Global Inc (NASDAQ: COIN) announced some cutbacks as a result of “the current market conditions.” The cost-cutting measures taken by Coinbase include suspending the hiring process for both new and backfill roles “for the foreseeable future” as well as rescinding a number of accepted offers.
Cost-Cutting Plans by Coinbase
At the beginning of the year, Coinbase was planning to triple its size. However, the bear market has not allowed it to live up its plans. Two weeks ago, Coinbase announced changes in its hiring plan for the first time. As the company explained at that time, such a decision was made to ensure that Coinbase was rigorous in its resource prioritization. In other words, slowing hiring would help the company reprioritize its hiring needs against its highest-priority business goals in this unstable time.
L.J Brock, Chief People Officer at Coinbase, explained:
“We always knew crypto would be volatile, but that volatility alongside larger economic factors may test the company, and us personally, in new ways. If we’re flexible and resilient, and remain focused on the long term, Coinbase will come out stronger on the other side. These challenges can be career-defining, helping us learn and grow.”
Earlier, Coinbase also announced it would cut down on spending in an effort to grow revenue. As its Q1 2022 results have shown, the exchange incurred a net loss of $430 million in its first-quarter earnings as well as saw its stock plunging. Therefore, Coinbase launched an initiative code-named Plutus. Within this program, Coinbase would cut spending on cloud services and gas fees among other cost-cutting measures. Instead, it will now focus on retail trading, staking, institutional trading, and custody, as well as its Coinbase One subscription service.
Bear Market Rally
Coinbase is not the only company to take cost-cutting measures in the current market conditions. Recently, the Gemini exchange announced laying off 10% of its staff, or about 100 people. Latin America’s top exchange Bitso laid off 80 employees, while Argentina’s Beunbit exchanged nearly halved its headcount. Middle Eastern exchange Rain reportedly laid off dozens of employees as well.
Crypto exchanges globally are going through hard times at present. So far in 2022, the Nasdaq Composite index is more than 20% down, which is technically a bear market. Besides, the S&P 500 index is down more than 13%, while the Dow Jones Industrial Average (DJIA) is down nearly 10%. Notably, at the beginning of May, the Dow and Nasdaq recorded their worst day performances in almost two years.