Coinbase slows hiring plans after the crypto exchange's users fell

Yahoo Finance Live anchors discuss Coinbase’s decision to pull back on its hiring plans amid weak quarterly earnings.

Video transcript

BRAD SMITH: Another name that's in the green right now is Coinbase, actually. It's up by about 3% on the day. Coinbase is pulling back on its hiring plans after the company reported weaker earnings, saying that they plan to reprioritize headcount needs. And particularly, within this memo, they said, importantly, now is the time to ensure that they're fully integrating recent hires, ensuring that they're successful at Coinbase. But they also mentioned, heading into this year, they plan to triple the size of the company. Given market conditions, currently, they feel it's prudent to slow hiring and reassess their headcount needs, as well.

BRIAN SOZZI: I say, good.

JULIE HYMAN: They finally read the room.

BRIAN SOZZI: Aw, you took my line.

JULIE HYMAN: Oh, sorry. Sorry.

BRIAN SOZZI: We hammered Brian Armstrong last week when Coinbase reported earnings. When you're adjusted operating profits for Coinbase go from $1.2 billion in the fourth quarter to $20 million, in large part because people are trading less and the pullback in Bitcoin, you have to do something. And you look at where their expenses were in the first quarter, they were abysmal. They accelerated versus the company's February outlook. Of course they have to slow this stuff down.

Robinhood's cutting expenses. They're essentially the same darn companies.

JULIE HYMAN: Yeah, it makes-- I mean, they couldn't-- they don't--

BRIAN SOZZI: We agree.

JULIE HYMAN: They didn't really have a choice in the matter.

BRIAN SOZZI: I think it's the first we agree on in the past four days.

JULIE HYMAN: Is that true?

BRIAN SOZZI: Show-wise. Everything else, we agree on.

JULIE HYMAN: Yeah, I guess that's right.

BRAD SMITH: I mean, for Coinbase, yeah, it comes back to reading the room, absolutely, after this most recent earnings call, where they were talking about the NFT marketplace. Nobody was really wanting to hear about what's going to pay off three years down the line--

BRIAN SOZZI: Nobody cares.

BRAD SMITH: --perhaps. What is happening right now, especially last week, when they did report, it was the sell-off in crypto. It's the continued pressure in what they have built up their business on, in being in exchange for people to come buy and sell cryptocurrency assets or digital assets and then hope that they continue to add on to those positions. Also, not just individuals, but institutions, and building up that part of the business too.

BRIAN SOZZI: And institutions are demanding that tech companies-- Coinbase, Robinhood, you name it, even Netflix-- they want executives to pull back on expenses. Something we talked about a little bit in the fund manager survey. But still, these are the conversations happening right now.

JULIE HYMAN: Yeah, it makes sense that people sort of buckle down. I mean, you know, and not just the Coinbases of the world, whose businesses are especially challenged. But to your point, investors want businesses across the board to be doing this kind of stuff.