Coinbase, the third-largest crypto exchange by volume, has changed its tune on hiring amid a market downturn.
“Heading into this year, we planned to triple the size of the company. Given current market conditions, we feel it’s prudent to slow hiring and reassess our headcount needs against our highest-priority business goals,” Emilie Choi, Coinbase’s president and COO wrote in a post on the company’s website today.
Choi noted that headcount growth is a key input in the company’s financial model, and that slowing the rate of hiring is important in ensuring Coinbase can reach the profitability guidance it has set for investors.
The news comes as cryptocurrency markets take a beating more broadly, catalyzed by uncertainty in the equity markets as a whole as well as the recent collapse of the Terra UST stablecoin.
Coinbase’s stock is down nearly 80% today compared to its IPO price, though it’s worth noting the company’s top line had already been suffering from a decline in crypto trading volumes since the beginning of the year. The company, which depends on trading activity for most of its revenue, reported a loss of $430 million during the first quarter of 2022.
Coinbase also drew controversy last week for a disclosure in its quarterly report saying that shareholders could lose the funds they have deposited in the exchange in the event it goes bankrupt. CEO Brian Armstrong tweeted a clarification after the fact, reassuring users that Coinbase has “no risk of bankruptcy” but adding that “it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings even if it harmed consumers.”