A message from Coinbase CEO and Cofounder, Brian Armstrong

By Brian Armstrong, CEO and Cofounder

Earlier today, I shared the following note with all Coinbase staff members.

Team,

Today I am making the challenging choice to decrease the size of our group by about 18%, to guarantee we remain healthy throughout this financial slump. I wish to stroll you through why I am making this choice listed below, however initially I wish to begin by taking responsibility for how we got here. I am the CEO, and the dollar stops with me.

Over the previous month, I've had numerous discussions with our Exec group and our Board to talk about current market occasions in addition to the state of our company. Numerous truths have actually ended up being clear to me in these conversations:

• Economic conditions are altering quickly: We seem getting in an economic downturn after a 10+ year financial boom. An economic crisis might result in another crypto winter season, and might last for a prolonged duration. In previous crypto winter seasons, trading income (our biggest income source) has actually decreased considerably. While it's tough to anticipate the economy or the marketplaces, we constantly prepare for the worst so we can run business through any environment.
• Managing our expenses is important in down markets: Coinbase has actually endured through 4 significant crypto winter seasons, and we've developed long term success by thoroughly handling our costs through every down duration. Down markets are challenging to browse and need a various state of mind.
• We grew too rapidly: At the start of 2021, we had 1,250 staff members. At the time, we remained in the early innings of the bull run and adoption of crypto items was blowing up. There were brand-new usage cases allowed by crypto getting traction almost weekly. We saw the chances however we required to enormously scale our group to be placed to complete in a broad selection of bets. It's challenging to grow at simply the ideal rate provided the scale of our development (~200% y/y given that the start of 2021). While we attempted our finest to get this perfect, in this case it is now clear to me that we over-hired.

1. The requirement to handle expenditures: As we run in this extremely unsure duration on the planet, we wish to guarantee we can effectively browse an extended slump. Our group has actually grown extremely rapidly (>> 4x in the past 18 months) and our staff member expenses are too expensive to efficiently handle this unsure market. The actions we are taking today will enable us to more with confidence handle through this duration even if it is seriously lengthened.
2. The requirement to increase effectiveness: We have actually now surpassed the limitation of the number of brand-new staff members we can incorporate while growing our performance. For the previous couple of months, including brand-new staff members has actually made us less effective, not more. We have actually seen ourselves decrease substantially due to coordination headwinds, and problem totally incorporating brand-new employee. Our company believe the targeted resourcing modifications we are making today will enable our company to end up being more effective.

Both of these returned to my choice to considerably scale our group over the previous 2 years, so this responsibility rests completely with me.

Our senior leaders have actually worked vigilantly to determine the suitable modifications for each of their groups based upon our clarified concerns.

In the next hour every staff member will get an e-mail from HR notifying if you are impacted or unaffected by this layoff. Every impacted staff member will get an invite to have a direct discussion with your HRBP and the senior leader of your company.

If you are impacted, you will get this alert in your individual e-mail, due to the fact that we decided to cut access to Coinbase systems for impacted staff members. I recognize that elimination of gain access to will feel abrupt and unforeseen, and this is not the experience I desired for you. Provided the variety of workers who have access to delicate consumer info, it was sadly the only useful option, to make sure not even a bachelor made a rash choice that hurt business or themselves.

I likewise wished to make certain that all impacted staff members are looked after in this shift, which we support them in discovering a brand-new function. Staff members who are leaving today will get:

1. Minimum of 14 weeks of severance plus an extra 2 weeks for each year of work beyond 1 year
2. 4 months of COBRA medical insurance in the United States, and 4 months of psychological health assistance worldwide
3. Access to Talent Hub, where members of Coinbase's group will work to get in touch with you with employment opportunities at other companies (consisting of portfolio business from Coinbase Ventures and other leading crypto VC funds)

Coinbase staff members are amongst the most gifted on the planet, and I am particular that the abilities you all have will continue to be searched for by business worldwide. I recognize it might take longer in this environment to discover brand-new work, therefore my hope is that this monetary and non-financial support assists make this unforeseen shift for you as smooth as possible.

To our associates who are leaving, I wish to state thank you for providing whatever to this business, which I am sorry. I hope that as we grow once again we get a possibility to employ you back. We would not be where we are today without your effort and commitment to our objective. I am extremely grateful for whatever you have actually done to add to our success.

To our group that is remaining, I understand this will be a tough day for you all too. You will bid farewell to your associates that you've remained in the trenches with. I likewise anticipate you will all feel some level of worry, unpredictability and doubt about the future. Know that we made these difficult choices to guarantee our future is brilliant. We'll share more on how we rally as a group in the next couple of days. Now, let us thank all our coworkers who are leaving for the crucial contribution they've made to our objective.

Brian

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This article includes forward looking declarations. These forward looking declarations are just forecasts and might vary materially from real outcomes due to a range of aspects. The dangers and unpredictabilities that might trigger real outcomes to vary from the outcomes anticipated are more completely detailed in our filings with the Securities and Exchange Commission. Any forward looking declarations consisted of herein are based upon presumptions that our company believe to be sensible since the date of this article. We carry out no commitment to upgrade these declarations as an outcome of brand-new details or future occasions.

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