The decision meant that 30 staff at Coinbase’s Chicago office were laid off yesterday, with immediate effect. There has been no official comment on the total investment sunk in the project so far, but it is estimated to run into the hundreds of millions of dollars. Software engineers with the ability to build matching engines of this kind can get paid hundreds of thousands per year.
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“We have made the difficult decision to consolidate the matching engine efforts,” said a company statement. Strong progress has been reported at Coinbase’s matching engine in San Francisco, which may be intended to pick up all the slack on its own.
The Chicago matching engine was expected to deal with high-frequency trading—but Coinbase now says it won’t focus on that area. Instead, services like over-the-counter trading are expected to play a bigger part in its offering. The company told Fortune its offices in London and New York will keep growing.
Coinbase generated nearly $520 million in revenue last year.
A Coinbase spokesperson gave The Block mixed messages. “We are a culture that is committed to repeatable innovation, knowing full well that not everything we attempt will succeed. Then added: “We continue to grow our institutional team.” The company remains in a strong position and can probably afford to take its time over expansion. It is estimated to oversee half of all trading on regulated exchanges in America and generated nearly $520 million in revenue last year, according to Reuters estimates.
Coinbase went through rapid growth last year. It employs three times as many people as it did in 2017. Turnover has been high in the company’s top ranks recently. The head of its institutional investor platform GDAX, Dan Romero, has already departed—having taken the job only last year.