Cryptocurrency trading platform Coinbase plans to cut approximately 20% of its workforce, or about 950 employees, in its latest round of layoffs in less than a year.
In a message to employees Tuesday, CEO and cofounder Brain Armstrong said the layoffs come as the company aims to “weather downturns in the crypto market.”
“While it is always painful to part ways with our fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount,” Armstrong said.
Coinbase in June announced plans to let go of about 1,100 employees, or approximately 18% of its global workforce. Armstrong in the memo said the company “could have cut further” in last year’s layoffs.
Armstrong said the job cuts are part of a plan to cut Coinbase’s operating expenses by about 25% on a quarter-over-quarter basis. He also said the company will shutdown several projects with “a lower probability of success.”
Coinbase expects to incur about $149 million to $163 million in total restructuring costs, including approximately $58 million to $68 million in charges related to employee severance and other termination benefits, according to a regulatory filing.
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What does Coinbase do?
Founded in 2012, Coinbase is a cryptocurrency exchange platform that allows users to buy, sell and trade cryptocurrency.
According to the company website, “our platform is built to secure your digital assets while ensuring that they remain readily available for trading and other services that we provide.”
How many employees does Coinbase have?
Coinbase employed about 4,700 full-time workers as of Sept. 30, down by more than 200 people from the end of the previous quarter, according to company financial records.
The company said it expects its restructuring plan will be substantially completed by the second quarter of 2023.
Crypto downturn, FTX fallout
Cryptocurrency markets saw a volatile 2022, with plunging prices and the collapse of crypto exchange FTX.
Crypto giant FTX in November filed for bankruptcy, and its founder, Sam Bankman-Fried, last week pleaded not guilty to charges that he misappropriated billions of dollars in costumer funds.
Without mentioning names, Armstrong in his note to employees cited “the fallout from unscrupulous actors in the industry” as a factor behind the company’s cost cutting measures.
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What tech companies have laid off employees?
Coinbase joins several tech companies that have implemented layoffs and other cost cutting measures, as employers brace for a potential economic recession.
Last week, Software company Salesforce announced plans to cut 10% of its workforce, saying it hired too many people as revenue surged during the pandemic.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” Salesforce CEO Marc Benioff said in a note to employees.
E-commerce giant Amazon, meanwhile, said it will eliminate about 18,000 jobs, following a previous round of mass layoffs in November.
Facebook parent company Meta in November announced plans to cut more than 11,000 jobs, or about 13% of its staff. Meta CEO Mark Zuckerberg admitted he misread how the pandemic-fueled e-commerce boom would play out.
“Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected,” Zuckerberg said. “I got this wrong, and I take responsibility for that.”