Coinbase Employees Once Again Suffer Lay Offs
- Coinbase has once again reduced its workforce by 20% and 950 employees have been laid off.
- The exchange will reduce its expense by 25% and will close all its projects which have low probability of success.
- CEO Brian Armstrong confirmed that his exchange is “well capitalized, and crypto isn’t going anywhere.”
- All US employees will receive a minimum of 14 weeks of base pay (2 additional weeks per year worked), health insurance, etc.
Crypto businesses had taken a heavy beating in 2022 and it seems that a new year hasn’t changed much as there are already rumors of some crypto exchanges facing financial troubles. As investors enter the second week of 2023, the largest crypto exchange in the US, Coinbase, let go of a significant number of employees owing to the worsening crypto climate and declining trading volumes.
According to an announcement by Coinbase on January 10, CEO Brian Armstrong confirmed that his company is letting go of 20% of its employees. Interestingly, the exchange let go of a similar percentage of its workforce in 2022 after suffering significant losses in its businesses due to a decline in general interest in the crypto space following the 2021 bull market.
Armstrong noted that in 2022, “the crypto market trended downwards along with the broader macroeconomy,” and as a result, Coinbase “also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion.” The executive also confirmed that his exchange is “well capitalized, and crypto isn’t going anywhere.”
“I believe recent events will ultimately end up benefiting Coinbase greatly (a large competitor failing, emerging regulatory clarity, etc.), and they validate our long term strategy. But it will take time for these changes to come to fruition and we need to make sure we have the appropriate operational efficiency to weather downturns in the crypto market, and capture opportunities that may emerge,” Armstrong said.
The CEO of Coinbase confirmed that it is letting go of 950 people and is also reducing its operating cost by around 25% due to the presence of bears in the crypto space and the fall in price of Bitcoin (BTC), the world’s biggest crypto coin. Armstrong noted that “while some of the factors that have brought us to this point are beyond our control, accountability rests with me as the CEO.”
Additionally, the Coinbase executive revealed that his exchange has gone through several crypto bear markets in its decade-long existence but noted that “this is the first time we’ve seen a crypto cycle coincide with a broader economic downturn.”
“We also reduced headcount last year as the market started to correct, and in hindsight, we could have cut further at that time,” said Armstrong.
The exchange is also shutting down several crypto projects that have a lower probability of success. The Nasdaq-listed company stated that it will reveal more about the financial details in its earnings call in February. Coinbase confirmed that the employees that are being let go will be provided a comprehensive package, and those who worked in the US will receive a minimum of 14 weeks of base pay (2 additional weeks per year worked), health insurance, and other benefits.
Armstrong also took a shot at the collapse of FTX and stated that “dark times also weed out bad companies, as we’re seeing right now.” Interestingly, the exchange has recently partnered with Google and has also been greenlit to operate in Singapore.