American bitcoin exchange Coinbase will cut staff by around 18% due to the start of the crypto winter.

Co-founder and CEO Brian Armstrong described it as a “difficult decision”.

“A larger market downturn means we need to be more cost-conscious as we approach a potential recession,” he wrote.

Armstrong noted that the company’s staff has more than quadrupled in the past 18 months. Growth too quickly caused problems in coordinating and integrating new team members, making the team less efficient.

The company will notify employees affected by the reduction in personal messages. Access to confidential customer information will be immediately denied.

“I understand that the removal of access will be unexpected and sudden, and this is not the experience I want for you. […] Unfortunately, it was the only practical choice to ensure that no one made a hasty decision that would harm the business or the business,” Armstrong explained.

For laid-off workers, the exchange will pay compensation in the amount of 14 weeks’ salary with bonuses for working more than a year. Coinbase will also pay for 4 months of health insurance and help further employment, including portfolio companies of the venture division.

According to CNBC, Coinbase has about 5,000 full-time employees. Layoffs will affect around 1,100 of these.

Earlier, Gemini management, Crypto.com CEO Chris Marszalek, and BlockFi co-founders Zach Prince and Flory Marquez announced the upcoming cuts at their company.

By contrast, Binance head Changpeng Zhao said that the crypto winter is the right time to expand staff.

Ripple CEO Brad Garlinghouse stated that the firm is facing a downturn in the market with “significant cash balances” that will allow it to hire new employees.

“In the near future, the market is likely to decline. But I and others are confident that cryptocurrencies will become an integral part of global financial systems in the future. You go quieter – you will continue, ”she stressed.

According to Garlinghouse, Ripple has experienced several bearish market cycles in its history and will “do it again.”

Coinbase shares fell almost 6% from their closing price after the trade opened. Shares are trading at $49.

Recall that in April 2021, Coinbase entered the exchange through a direct listing on the Nasdaq. On the first day, trading closed at $328.28 per share.

For the first quarter of 2022, Coinbase reported a net loss of $429.7 million, a figure that nearly doubled analysts’ expectations.

Against a weak start to the year and the slump in the cryptocurrency market, the company began optimizing costs.