- Coinbase has announced plans to cut about 950 people.
- The restructuring decision was due to “ongoing market conditions impacting the crypto economy.”
- The layoffs follow similar layoffs last year during a bear market for cryptocurrencies.
- In addition to layoffs, Coinbase plans to abandon several projects with ‘low chances of success’
- Nearly 27,000 jobs have been lost across the crypto industry since April 2020, according to CoinDesk.
- Coinbase shares rose 5.5% after the company announced layoffs.
Coinbase has announced that it will cut about 20% or 950 employees as part of restructuring work that is expected to be completed by the end of Q2 2023.
According to the company, the restructuring decision is a response to “ongoing market conditions impacting the crypto economy,” as described in filings with the U.S. Securities and Exchange Commission.
“It’s always hard to say goodbye to a colleague, but there was no way we could cut costs significantly without considering a change in personnel,” Armstrong said in a note.
“The fall of FTX and the consequent contagion put a dark eye on the industry,” he said, adding that there are likely more “shoes to drop.” In an interview on CNBC.
“We may not have seen the end of it. Scrutiny will be intensified to ensure that various companies in the sector are following the rules.”
“In the long term, that’s good. But in the short term, there’s still a lot of market uncertainty.”
The company expects the restructuring process to cost $149 million to $163 million, including $58 million to $68 million in cash costs related to employee retirements.
The job cuts follow a series of similar job cuts last year during a bear market for cryptocurrencies. CEO Brian Armstrong explained that the company grew too quickly during the bull market and needed to cut costs to improve its chances of success in all market scenarios.
“One of the crazy parts of our industry is that it can grow 300-500% or -50% in any given year. It’s very difficult planning and culturally.” – CEO Armstrong previously said on the official Twitter account:
In addition to layoffs, Coinbase plans to discontinue several projects with a “low chance of success.”
Nearly 27,000 jobs have been lost across the crypto industry since April 2020, according to CoinDesk.
The cryptocurrency market has been hit hard in recent months by the collapse of one of the industry’s major players, FTX. The incident has led to increased pressure and scrutiny on the sector, with some individuals, such as FTX founder Sam Bankman-Fried, being dubbed “malicious actors” in the industry.
After the announcement, Coinbase’s stock price rose 6%.
Coinbase shares surged 6% after the company announced layoffs.
While the move will significantly reduce headcount, it is also expected to reduce costs for the company. Investors seemed to take the news positively, and the stock price rose significantly after the announcement.
This kind of downsizing is not uncommon in a cryptocurrency with high volatility and a constantly evolving industry. Several crypto companies have already announced layoffs, including Crypto.Com, Gemini and Celsius.
