Coinbase Backtracks on its Hiring Plans

Coinbase has changed its tune on hiring amid a market downturn that’s had investors fearing the worst.

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.

To calm investor the post said, that these changes are not expected to have any material impact to our previously communicated expense outlook for Q2, or full-year 2022, as disclosed in our Q1 shareholder letter. The market has to absorb the news pretty well with Bitcoin (btc) trading just above $30,000.

However, Choi noted that headcount growth is a key input in the company’s financial model. Slowing the rate of hire to control expenses as trading profits might dry up if markets remain bearish is important for Coinbase to reach the profitability guidance it has set for investors.

The question about market stability is important as all markets are take a brutal beating more broadly caused by uncertainty in the markets and the recent devastating collapse of the Terra UST stablecoin. For those of us in traditional stocks market. Investing in Coinbase’s stock has been terrible as it is down nearly 80% today compared to its IPO price.

The hiring news comes right after the exchange
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. This caused CEO Brian Armstrong to have to send out a tweet storm with clarification after the fact.

All I can say is it’s been a tough couple of weeks for Coinbase and an even tougher week for crypto investors. I really hope this news out of Coinbase is not a predictor for more pain ahead, but as a weathered crypto enthusiast I have more powder dry to dollar cost average.

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