Coinbase announced on Tuesday that it’s cutting 20% of its workforce as it contends with disruptions within cryptocurrency markets.
The layoffs, which will impact roughly 950 workers, are part of a restructuring plan to help the company reduce operating expenses as market conditions continue to impact the cryptoeconomy, Coinbase said in Tuesday filing with the Securities and Exchange Commission (SEC).
“In 2022, the crypto market trended downwards along with the broader macroeconomy,” Coinbase CEO Brian Armstrong said in a blog post. “We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion.”
WHERE DID THE MONEY GO IN FTX CRYPTO COLLAPSE?
Over the past year, bitcoin has plunged almost 60%. The volatile year got even worse in late 2022 with the collapse of cryptocurrency exchange FTX which filed for bankruptcy protection in November after experiencing the equivalent of a bank run.
The company already eliminated 18% of its global workforce in a round of cuts last summer. In hindsight, Armstrong said the company “could have cut further at that time.”
Looking ahead to 2023, it became clear that the company would need to reduce expenses in order to increase its chances of doing well, he said. Although the additional layoffs are “painful,” Armstrong said there is no other way to help significantly reduce the company’s expenses.
COINBASE LAYS OFF 18% OF WORKFORCE
“The crypto industry is difficult to predict, but it’s important to have planning in place that ensures we can succeed as a business in multiple potential outcomes,” Armstrong said, adding that this is “the first time we’ve seen a crypto cycle coincide with a broader economic downturn.”
The company plans to complete its restructuring plan by the second quarter.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Coinbase is a remote-first company that was founded in 2012 and has no headquarters. It went public in April 2021 by listing its stock directly and skipping the traditional process of hiring underwriters.
The Associated Press contributed to this report.