The bloat was particularly bad for Coinbase’s customer service team. New staff members often feel like they don’t have enough to do. “I got maybe four phone calls a day for a while,” said David Visini, a customer service employee who was laid off. “It was dead, dead, dead.”
Ms. Choi, the chief operating officer, acknowledged that Coinbase had been “overhiring” during the pandemic and said it was difficult to onboard new hires in a remote environment.
“I don’t know if we had exactly the right set of tools to put them in place to be successful,” she said.
The crypto market crashed in May, causing Coinbase’s share price to fall by around 60%. In the first quarter, Coinbase’s revenue fell 27% from a year earlier to $1.17 billion, even as its expenses more than doubled to $1.72 billion.
Its competitors seem to be doing better. Sam Bankman-Fried, chief executive of FTX, said in an email that its financial results were “in line” with last year, when the company posted profits of around $350 million. Binance, the world’s largest exchange, declined to reveal its revenue figures. But in June, the company’s founder and general manager, Changpeng Zhao, announcement he was hiring for 2,000 vacancies.
That month, Coinbase employees circulated a petition calling for the ousting of several top executives. Mr. Armstrong responded aggressively on Twitter, calling on disgruntled employees to quit. But at a staff meeting, he and other executives struck a more dovish note, saying employees should keep faith in crypto and the company would emerge stronger from the tumult, according to two people present.
A few days later, the company laid off 1,100 employees.