Coinbase reported a 27% decline in profits in the first quarter as usage of the platform declined.
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Coinbase has become the latest tech company to warn of a slowdown in hiring.
The crypto exchange told staff Tuesday that it will slowly hire and re-evaluate the number of employees, reversing previous plans to increase its workforce by 2022.
“Given the current market conditions, we feel it is wiser to slowly hire and re-evaluate headcount needs against our highest priority business objectives,” said Emilie Choi, Coinbase’s chief operating officer, in a send a blog.
“Headcount growth is a key input to our financial model, and this is an important action to ensure that we manage our business for our planned scenarios.”
With very high technology stocks in doldrumsthe company is reassessing that plan in a bid to convince investors they can weather the storm. The Nasdaq Composite has lost about a quarter of its value since the beginning of the year amid concerns about rising inflation and aggressive interest rate increases from the Federal Reserve.
Coinbase has been particularly affected, with shares plunging 74% annually, amid falling prices. bitcoin and other digital currencies. Bitcoin sedhela tumbled below $ 26,000 on Thursday, the lowest rate since December 2020, after Terra collapsedthe controversial stablecoin project.
Coinbase shares were up about 7% Tuesday.
Coinbase, which makes most of its revenue from trading fees, reported a 27% decrease in profits in the first quarter as platform usage dipped. In a phone call with analysts, Coinbase management said the company had invested “quite a lot” in compliance but hinted at slowing hiring as one of the “levers” it could use to cut down on costs.
“We know this is a confusing time and market downturns can be scary,” Choi said Tuesday. “But … we planned all the market scenarios, and now we’re starting to implement some of those plans.”
He added: “We are in a strong position – we have a solid balance sheet and we have experienced some market downturns before, and we have become stronger all the time.”
The move makes Coinbase the latest technology company committed to reducing investment in leases. Uber and parent company Facebook Meta has taken the same steps, when Robinhood is cut the headcount by approximately 9%.