Crypto crash | Fearing a PR fiasco, Coinbase cuts system access for thousands of laid off workers

A cryptocurrency firm is cutting almost a fifth of its workforce following a huge market crash, and has taken steps to ensure disgruntled ex-staff don’t leak confidential information.

Coinbase Global Inc will cut about 1,100 jobs, or 18% of its workforce, as it bids to ride out the extreme volatility currently affecting the crypto market.

Investors have been dumping risky assets on fears that higher inflation readings would force the U.S. Federal Reserve to turn more aggressive in raising interest rates and tip the economy into a recession.

Bitcoin, the world's largest cryptocurrency, tumbled as much as 14% earlier this week after crypto lender Celsius Network froze withdrawals and transfers.

"We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period," Coinbase’s CEO Brian Armstrong said in a blogpost.

Employees departing the company will also receive the following as part of their severance:

• Minimum of 14 weeks of severance plus an additional 2 weeks for every year of employment beyond 1 year

• 4 months of COBRA health insurance in the US, and 4 months of mental health support globally

• Access to Talent Hub, where members of Coinbase’s team will work to connect with you with open positions at other firms (including portfolio companies from Coinbase Ventures and other top crypto VC funds)

“Coinbase employees are among the most talented in the world, and I am certain that the skills you all possess will continue to be sought after by companies around the world”, Armstrong wrote.

“I realize it may take longer in this environment to find new employment, and so my hope is that this financial and non-financial assistance helps make this unexpected transition for you as seamless as possible.”

In an apparent attempt to avert any PR fiascos, Armstrong said employees affected would receive an email to their personal address because “we made the decision to cut access to Coinbase systems for affected employees.”

He added: “I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you. Given the number of employees who have access to sensitive customer information, it was unfortunately the only practical choice, to ensure not even a single person made a rash decision that harmed the business or themselves.”