On June 14, the largest US crypto exchange Coinbase Global Inc. announced that it was preparing to lay off 18% of employees, that is, about 1,100 of the 6,100 people who worked in the company. CEO Brian Armstrong explained the need for staff reductions by the deteriorating situation in the cryptocurrency market – over the past two months, it has lost $1 trillion in capitalization and rolled back to the beginning of 2021, when the market capitalization of cryptocurrencies was less than $1 trillion.

Tellingly, just four months ago, Coinbase spent $14 million on aSuper Bowl ad that consisted almost entirely of a colorful QR code that bounced across the screen and encouraged viewers to go to a website where they could get $15 in bitcoin for signing up.

And now, after some four months, Coinbase management, which recently began refusing jobs to candidates that passed an interview and received a formal offer (in yesterday’s Motherboard publication , more than 300 people were turned down after they accepted a job offer), is preparing to the impending “crypto winter”.

Coinbase CEO Brian Armstrong, in an official statement posted on the company’s blog, lamented changing economic conditions that could lead to a “crypto winter” and then, reaching point three, recalled that the company was “overzealous in hiring,” justifying itself by trying to take advantage of the benefits. “new use cases that emerge on a weekly basis due to the explosive growth of the cryptocurrency market.” But it didn’t happen as it was thought.

2/ We also grew quite quickly over the past two years and have begun to operate less efficiently at our new size. It will take us some time to adjust to this new scale before growing again.

— Brian Armstrong — barmstrong.eth (@brian_armstrong) June 14, 2022

Everyone will receive an email “chain letter” from Human Resources to find out if their position is subject to redundancies. Those laid off will receive at least 14 weeks of severance pay, plus an additional two weeks for each year of service after the first, plus four months of COBRA health insurance in the US and four months of mental health support worldwide, as well as access to its talent center. which is designed to help them find a new job.

Four days ago, Armstrong got into a Twitter controversy when he called an employee petition calling for the dismissal of Coinbase executives “really dumb on multiple levels” and urged employees who are dissatisfied with the situation to come up with options and look for solutions with the team or quit.

This petition touches on a number of problematic aspects that do not seem as pointless as Armstrong described them – in particular, its authors criticize the leadership for its policy of “aggressive hiring for thousands of roles, contrary to the logic of the crypto industry and despite the unviability of the plan.” The document did not mention Super Bowl ads, but did mention the over-prioritization of certain projects, including the Coinbase NFT platform , which management did not choose the best time, given the decline in market activity and the fading interest in the very idea of trading digital tokens.

In May, The Wall Street Journal reported that Coinbase executives, including Armstrong, co-founder Fred Ersam, President and COO Emily Choi, and Chief Executive Officer Surojit Chatterjee, received $1.2 billion from the sale of shares after the IPO in April 2021 of the year. The stock opened at $382 and is now trading at around $52. A New York Times article in April reported that employees are leaving tech companies for crypto startups in a get-rich-quick rush, citing Chatterjee as an example — just 14 months after he left Google for Coinbase, his stake in the company already cost (then) over $600 million.

Other crypto firms such as BlockFi , Crypto.com and Gemini have also recently announced layoffs after bitcoin and the entire crypto market went downhill. Recall that the most popular cryptocurrency in the world has been depreciating for 12 weeks in a row and has already lost about 70% of the maximum of $69,000 — this is how much the cryptocurrency was worth by the end of 2021.

Cryptocurrency market capitalization fell below $1 trillion for the first time since the beginning of 2021