Coinbase’s Workforce Growth Signals Crypto Industry Rebound
Coinbase’s Peak Workforce Size
This week, Coinbase announced that it has reached its highest workforce size in nearly two years, signaling a possible recovery in hiring within the cryptocurrency sector. This increase comes as a hopeful sign that the industry is beginning to stabilize after the significant market fluctuations that impacted hiring practices throughout 2022.
Current Employee Statistics
According to Coinbase’s most recent quarterly update, the company concluded Q3 with a total of 3,672 full-time employees. This figure represents a 5% growth from the previous quarter and a 7% increase since the beginning of the year. However, it still lags behind the 4,510 employees counted at the end of 2022, indicating that while there is improvement, the company has not fully returned to its pre-2022 staffing levels.
In Q2 of this year, Coinbase reported having 3,486 full-time employees, which means that the company has successfully added 186 staff positions since then. Prior to these numbers, the workforce had been relatively stable around 3,500, suggesting that this upward trend may be the first substantive expansion for Coinbase in quite a while.
Substantial Investments in Workforce
In January 2023, Coinbase undertook a restructuring plan that resulted in a 21% reduction in its workforce. This strategic decision was designed to cut operating costs and shift focus amid persistent challenges in the cryptocurrency market. However, the recent increase in staffing indicates a renewed commitment to growth.
Financially, the company has demonstrated significant investment in its workforce. In its 10-Q filing for Q3, Coinbase disclosed that it incurred personnel costs totaling $271 million. Additionally, $248 million was allocated for stock-based compensation, showcasing the company’s strategic focus on both direct employee costs and incentives that align staff goals with the company’s success.
Financial Performance and Market Context
Despite the encouraging growth in headcount, Coinbase faced disappointing financial results for Q3. The company reported total revenue of $1.2 billion, falling short of the FactSet estimate of $1.26 billion. Earnings per share were recorded at $0.28, missing the forecast of $0.45, and the adjusted EBITDA was $449 million, which was below the expected $469.2 million.
The mixed results highlight the challenges that Coinbase and the broader crypto market are still facing, despite increasing employee numbers. In contrast to Coinbase’s hiring expansion, many of its competitors have been cutting back. For instance, Kraken recently laid off 15% of its workforce while also appointing a new co-CEO. Similarly, Consensys has reduced its team by over 160 employees, equating to 20% of its workforce, and dYdX has cut its core team by 35%. This divergence in strategies reflects the varied approaches companies are taking in response to the current landscape of the cryptocurrency industry.