In the wake of the cryptocurrency market crashing, Coinbase said this week it was joining a number of tech companies by slowing down its hiring plans for this year. More details have emerged about Coinbase's efforts to cut costs after The Information obtained emails that were sent to employees.
The company is said to have frozen hiring for two weeks (though it will honor offers that have already been sent) and put new projects on hold. It is also reportedly trying to reduce how much it spends on hosting services.
Along with not hiring as many people as it previously expected to this year, Coinbase is looking to minimize employee attrition. According to the report, the company is giving workers more shares. Coinbase's stock has dropped by over 75 percent in the last six months.
Coinbase is said to have paused some projects, such as a business banking initiative, while it focuses on increasing revenue from core products, including retail and institutional trading. It's reportedly planning to offer retail customers more cryptocurrencies and to expand operations outside of the US.
When asked for comment, a Coinbase spokesperson directed Engadget to a tweet thread from chief product officer Surojit Chatterjee. While the company is renewing focus on its "high-impact products" and trying to "improve efficiencies by seeking improvements in developer productivity," Chatterjee noted that Coinbase doesn't plan to stop investing in strategic and venture projects. "We believe the down market is a great time to build for the longer term," Chatterjee wrote.
The company revealed in its first-quarter earnings report last week that, at $1.16 billion, net revenue fell by 27 percent year-over-year and by over half from the previous quarter. Trading volume also dropped. Amid a hiring spree (it's said to have brought in more than 1,200 new employees this year), operating expenses increased by nine percent from the previous quarter to $1.7 billion. Coinbase had a net loss of $430 million in Q1. All of that was before the cryptocurrency market nosedived earlier this month.
Stablecoin TerraUSD (which is supposed to be pegged to the value of the US dollar) and sister token Luna effectively collapsed, causing a ripple effect to other cryptocurrency prices. Though it has since rebounded a bit, the price of bitcoin also dipped below $26,000 for the first time in 16 months last week amid a sell off that saw over $200 billion wiped from the crypto market in one day.
Coinbase's shift in hiring strategy reflects a broader trend among prominent tech companies. Meta and Uber are among the major businesses that are cutting costs and slowing down recruitment plans. Meanwhile, Netflix laid off around 150 staff in the US this week and canceled some animated projects. The company's stock plummeted after it reported its first-ever quarterly drop in subscriber numbers last month.