Coinbase Lays Off Over 900 Employees
- Coinbase announced an 18% layoff in 2022.
- Coinbase CEO Brian Armstrong claims the exchange needs to cut costs to survive the bear market.
- Armstrong believes Coinbase will benefit from the FTX saga, as regulators are expected to implement new industry policies.
Coinbase Exchange will lay off more staff, according to a new announcement from the firm. The exchange cited “ongoing market conditions impacting the crypto economy” as the reason for its latest layoffs, which are estimated to have affected 950 employees. The massive retrenchment will also cost the firm about $163 million.
Coinbase stated in a filing with the Securities and Exchange Commission (SEC) that the layoffs will be completed by the second quarter of the year. The platform was one of the standout crypto exchanges during the 2021 bull market.
However, in July 2022, the company said it would commence an 18% layoff to survive the bear market. At the time, CEO Brian Armstrong said the company had “over hired” and needed to reduce costs to survive the market.
Armstrong believes the crypto industry will stabilize and affirmed that Coinbase is “well capitalized,” but needs to cut costs to stay efficient. Armstrong also confirmed that Coinbase will terminate projects with a “lower probability of success” as part of its cost-cutting measures. He did not, however, specify which projects would be affected.
While the FTX saga has been said to have brought doom to the crypto industry, Armstrong believes the situation could be profitable for Coinbase, especially with clarity on regulations. He said,
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.
Other crypto-related companies, including Silvergate Capital Corp., have announced plans to reduce their exposure to cryptocurrency, while New York-based Metropolitan Commercial Bank (MCB) announced a complete departure from the industry.