Coinbase reported a 27% decline in revenues in the first quarter as usage of the platform dipped.
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Coinbase has become the latest tech company to warn of a slowdown in hiring.
The crypto exchange told staff Tuesday it would slow hiring and reevaluate its headcount, reversing earlier plans to triple its workforce in 2022.
“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 chief operating officer, said in a blog post.
“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.”
With once high-flying tech stocks in the doldrums, companies are reassessing their plans in a bid to convince investors they can weather the storm. The Nasdaq Composite has lost around a quarter of its value since the start of the year amid concerns around rising inflation and aggressive interest rate hikes from the Federal Reserve.
Coinbase has been especially hit, with its shares plunging 74% year-to-date, amid a slide in the prices of bitcoin and other digital currencies. Bitcoin briefly tumbled below $26,000 on Thursday, its lowest level since December 2020, after the collapse of Terra, a controversial stablecoin project.
Coinbase shares were up about 7% Tuesday.
Coinbase, which makes most of its revenue from trading fees, reported a 27% decline in revenues in the first quarter as usage of the platform dipped. In a call with analysts, Coinbase management said the company is investing “pretty heavily” 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 that market downturns can feel scary,” Choi said Tuesday. “But … we plan for all market scenarios, and now we are starting to put some of those plans into practice.”
She added: “We’re in a strong position — we have a solid balance sheet and we’ve been through several market downturns before, and we’ve emerged stronger every time.”
The move makes Coinbase the latest tech firm to commit to reducing investment into hiring. Uber and Facebook parent company Meta have taken similar steps, while Robinhood is cutting its headcount by about 9%.