Due to the market situation, crypto unicorn tax CoinTracker fired around a fifth of its employees. According to an email issued to staff, 19 employees were laid off from the San Francisco-based cryptocurrency tax firm due to leadership citing crypto winter’s challenges and hiring too many individuals.
This week, it was made public that the DCG-owned cryptocurrency exchange Luno will reduce its workforce by 35%. In addition, Coinbase said earlier in January that it would be reducing 950 employees or 20% of its workforce. Moreover, Crypto.com noted that it would reduce its workforce by 20% that same week.
In the mail written on January 26, co-founder and CEO Jon Lerner stated:
Today we are challenged by the crypto winter, an unstable economy with high inflation and rising interest rates, and further headwinds with crypto tax rules.
Lerner also said the climate now is considerably different from what it was in the middle of 2020 and the middle of 2022. We have different goals for 2023 than we had last year.
Furthermore, 15 of the 19 people who were laid off, according to a corporate spokesman who verified the layoffs via email, were part of the customer service staff.
The corporation stated before considering letting go of team members that we had thoroughly optimized all other expenses. According to DealRoom and LinkedIn data, CoinTracker employed about 100 workers before the layoffs.
Equity Cliff After Lay Off
In addition to removing the equity cliff so that anybody leaving can continue to be a shareholder, CoinTracker provided affected workers 12 weeks of compensation, three months of healthcare coverage for those living in the United States, and 12 weeks of notice. However, they are free to retain their computers.
Lerner noted in the letter:
Today is challenging, but we continue to feel we have the proper structure and assets to develop a fundamental product in crypto.
After raising a $100 million Series A investment supported by Accel, Y Combinator, Coinbase Ventures, Seven Seven Six, and Kraken Ventures, among others, CoinTracker had a valuation of $1.3 billion at this time last year.
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Although not to the same extent as Coinbase’s layoffs, the tone is similar to that of CEO and co-founder Brian Armstrong in a letter to staff members sent in June. While we made every effort to get things precisely right. Armstrong said, “In this situation, it is clearly evident to me that we over-hired.”