This story was updated with more information at 1:00pm EST on Oct. 26.
Coinbase, the biggest cryptocurrency exchange in America, cut a handful of staffers this week in its customer support, compliance, and fraud departments, Yahoo Finance has learned.
Coinbase confirmed the cuts but would not confirm a head count. Sources say it was more than 15 people. One source inside Coinbase says, “People here are pretty upset about it, and so far senior leadership is handling communications poorly.”
At a company with 550 employees, 15 people may not sound significant. But any cuts at Coinbase are of interest at a time when the company is widely thought to be gearing up to go public. After a giant new funding round this month, Coinbase has an $8 billion valuation; it also added board member Chris Dodds, who is on the board at Charles Schwab, after losing boardmember David Marcus from Facebook.
Most of the people let go were remote employees.
Some were part of a customer service team that Coinbase announced back in 2013, saying in a blog post, “We recently hit 300,000 users on Coinbase… it’s become evident that in order to build the best customer service for our Coinbase customers we need to scour the world to find the best. As a result, we’re building a remote customer support team to accommodate our growing user base.”
Fast forward to 2018: Coinbase claims 25 million users and has offices in San Francisco, New York, Chicago, London, Tokyo, Portland, Ore., and Dublin. In January, Coinbase hired Tina Bhatnagar, a former Salesforce and Twitter executive, to oversee customer service. Bhatnagar, sources say, wants the customer service staff centralized in Coinbase’s offices. As a result, the remote support team members were let go, though some were offered the chance to relocate to a Coinbase office.
Coinbase, in a statement sent to Yahoo Finance, says, “We’ve learned that certain teams who are co-located are more efficient, effective, and happier in their roles. So moving forward, some teams—including Support, Fraud, and Compliance—will only hire employees into Coinbase offices.”
And Coinbase says its customer service has improved: “Our average time to first response via email is under four hours, under three minutes on the phone, and 90% of all cases are resolved within 48 hours.” The company adds that it will “continue to be open to remote employees” for jobs that are “hard to fill locally to an office.”
The cuts also speak to market demand. At the end of 2017, the cryptocurrency market soared and companies staffed up. During that frenzy, Coinbase was signing up 50,000 new customers each day. It further built out that decentralized customer support team.
This year has been a different story, with cryptocurrencies seeing red on most days. Bitcoin (BTC) is down 62% this year; bitcoin cash (BCH) is down 82%; ether (ETH) is down 79%; ethereum classic (ETC) is down 69%; litecoin (LTC) is down 80%. And most significant for Coinbase: trading volume is down. Among crypto circles, there have been whispers of Coinbase layoffs for a few months now.
As Coinbase navigates the choppy market while also eyeing an IPO, it is evolving and will likely make additional organizational changes.
Daniel Roberts covers bitcoin and blockchain at Yahoo Finance. Follow him on Twitter at @readDanwrite.