Coinbase has changed its mind on its hiring plans as the cryptocurrency market continues to decline. It is the third-largest crypto exchange by volume.
Emilie Choi, President and COO of Coinbase, revealed the company’s hiring plans. She stated on the firm’s website today that they intended to triple the number of their employees. However, the current market situation gives them the idea not to hasten their recruitment.
“…we feel it’s prudent to slow hiring and reassess our headcount needs against our highest-priority business goals. Headcount growth is a key input to our financial model, and this is an important action to ensure we manage our business to the scenarios we planned for, specifically the potential Adjusted EBITDA we are aiming to manage to,” Choi stated.
Crucial for the company
Choi remarked that employment growth is a critical component of the company’s financial model. Furthermore, lowering the pace of hiring is crucial for Coinbase to meet the profitability forecast it has provided to investors.
The recent collapse of the Terra UST stablecoin has triggered a general decline in the cryptocurrency markets, which volatility in the equities markets as a whole and the recent release of this news exacerbated.
Coinbase’s stock is down about 80% from its IPO price today, however, it’s worth noting that a drop in crypto trading volumes since the beginning of the year already impacted the company’s top line. The corporation derives the majority of its income from trading. Now, it recorded a $430 million loss in the first quarter of 2022.
‘In a strong position’
Coinbase also sparked outrage last week when it revealed in its quarterly report that stockholders risk losing their money if the exchange goes bankrupt. However, its CEO, Brian Armstrong, immediately clarified that Coinbase is “not in danger of bankruptcy.“
Choi also said that the firm is “in a strong position” and that it has “a solid balance sheet“.