Coinbase has decided to lay-off employees again to preserve cash in wake of crypto market downturn. Moreover, the company has announced to cut 950 jobs which makes its around one fifth of its total workforce.
Cryptocurrency market crash
Coinbase is a cryptocurrency trading platform which has announced the second phase of layoffs. The company cited uncertain economic conditions and disruptions within the crypto markets as the reason for this decision. Previously, Coinbase laid off 1,100 jobs which amounted to 18% of its total global workforce. Cryptocurrency market had a terrible 2022 with Bitcoin lost 60% value over the period of last year. Shockingly, the situation became worse during the end of the year. Cryptocurrency exchange FTX filed for bankruptcy protection in November after experiencing the equivalent of a bank run. Subsequently, the investors tried to withdraw their investments when the news regarding collapse of exchange started surfacing. Coinbase roughly had a workforce of 4,700 employees as of end of the September.
“With perfect hindsight, looking back, we should have done more. The best you can do is react quickly once information becomes available, and that’s what we’re doing in this case.” CEO Brian Armstrong told CNBC in a phone interview.
Restructuring will reduce 25% expenses
Coinbase Global Inc. said in a regulatory filing that layoffs are part of its restructuring plan. Moreover, the company estimated that the restructuring costs will lay somewhere from $149 million to $163 million in total. Significantly, around $58 million to $68 million of this cost will pertain charges related to employee severance and other termination benefits. Furthermore, the restructuring measures will help Coinbase in curtailing its expenses by 25% till March 2023. The restructuring will take place in sales and marketing, technology, development, and administration.
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