Coinbase joins list of employee layoffs, fires 20% of its workforce

Key Takeaways:

  • Coinbase Announces Additional Layoffs, Reducing Staff by 950 Personnel.
  • Armstrong highlighted that in order to safeguard the necessary operating effectiveness, Coinbase must continue with layoffs.

Coinbase Global, a cryptocurrency trading platform, has revealed the loss of roughly 1,000 jobs as part of a reorganisation plan. This represents about 20% of the company’s global workforce composition.

On January 10, Coinbase CEO Brian Armstrong formally announced that the business would eliminate 950 positions as part of efforts to slash operating expenses by about 25% in the midst of the prolonged crypto cold season.

According to Brian Armstrong, in 2022, the macroeconomy as a whole and the cryptocurrency market both trended lower. Many people witnessed the consequences of dishonest individuals in the field.

Armstrong also provided details on how the business came to make this decision. “As we looked at our 2023 scenarios, it became obvious that we would need to cut costs in order to improve our chances of succeeding in each one.

He further explained, even though it is always difficult to part ways with coworkers, there was no way to considerably cut their costs without taking headcount adjustments into account.

The company’s 8k form submission with the United Securities and Exchange Commission, which is attached to Coinbase’s blog announcement, affirms that Coinbase’s reviewed financial data for 2022 are not yet accessible.

The company estimates overall adjustment of expenses  between $149 million and $163 million, comprising charges of between $58 million and $68 million for employee severance and other termination benefits.

Armstrong acknowledged that “this last point feels completely unexpected and cruel, but I assume it’s the only prudent decision given our obligation to safeguard customer data” and added that affected employees will be notified of their layoff on 10th january. They have also already had access to Coinbase’s systems revoked.”

Health insurance, other perks, and a minimum of 14 weeks of base salary will be provided to employees in the US market.

End of 2022 undoubtedly sent shockwaves across the whole crypto sector, and Coinbase was no exception to the damage.

Results from Coinbase’s third quarter of 2022 were published. The exchange stated in its shareholder letter that the number of transactions fell by 44%, from $655.2 million in the second quarter to $365.9 million.

As the principal factors of the reduction in transaction volume, Coinbase highlighted macroeconomic concerns, geopolitical factors, and trade volumes shifting away from the United States owing to the lack of legislative clarity.

Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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