Coinbase saw huge growth in crypto and its headcount grew by 200% annually.
This is why the June reduction in employee numbers was made.
Now the focus on “driving efficiency” with scaling in mind to better serve customers.
Coinbase is looking into ways to increase efficiency during these tough crypto times. This was stated by Brian Armstrong, CEO of the largest crypto exchange. blog post.
Commenting on the company’s massive employee growth over the past eighteen months, Armstrong noted that it was a “ton” of growth. However, even as they adjust to that, it’s time to focus on “driving more efficiency.”
Coinbase grew by a lot in 2021, and we are still adapting to that growth. Our industry’s growth can vary between 300-500% and -50% in any one year. This makes it extremely difficult to plan and culturally absorb so many people in up periods.
— Brian Armstrong – barmstrong.eth (@brian_armstrong) July 12, 2022
According to Coinbase’s boss, unchecked workforce growth can cause a company to slow down and become less efficient.
When this happens, most largely to massive scaling, getting off the wrong turn often eats up “more dollars, more people and more time” just to get things going. In the interim;
“Coordination headwinds increase, vetocracies emerge, risk tolerance fades, and teams become inwardly focused instead of staying focused on their customers,” he added, pointing to the risks of unchecked headcount growth.
Amazing companies doing great things
Armstrong, whose firm was one of those to cut back employees in the crypto winter said that the result (layoffs), was what any great company would do.
“Every great company, from Amazon to Meta to Tesla, found ways to retain their founding energy in conjunction with appropriate controls, even as they scaled to be much larger than Coinbase is today,” he wrote.
He explained that in most cases, the so-called great companies always find ways to “maintain their insurgent mindset,” doing so to avoid careening into complacency and turning into an “irrelevant” at a later date.
“That’s why we’re focusing on driving more efficiency at Coinbase. Many of our internal tools and organizing principles are starting to fail after 18 months with a growth rate of approximately 200% y/y employees. So we’ve been digging in to identify the set of changes we need to make to help us succeed at this new scale,” he added.
This was one step towards achieving it. cut their headcount As it was done in June.
The exchange will also continue to find novel ways to add more efficiency to its services, with the objective being to return to that “mindset and approach” by which the company saw much success.