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Coinbase to slash 20% of workforce amid ‘crisis of confidence’ in crypto

Click to play video: 'Crypto exchange Coinbase dismisses 20% of workers in 3rd round of layoffs'
Crypto exchange Coinbase dismisses 20% of workers in 3rd round of layoffs
WATCH: Cryptocurrency exchange Coinbase is reducing its workforce by about 20 per cent in its third round of layoffs in a year, meaning 950 employees will be out of a job. Anne Gaviola has more. – Jan 10, 2023

Coinbase Global Inc said on Tuesday it will reduce its workforce by about 20 per cent, or 950 employees, as part of a restructuring plan, in a third round of layoffs for the cryptocurrency exchange since last year.

The company said it expects to incur about $149 million to $163 million in restructuring expenses. Its shares reversed course to fall 2.7 per cent premarket after rising more than five per cent on the layoffs announcement earlier.

“The entire industry is going through a crisis of confidence and trading volume remains very weak, this job cut is a reflection of the current challenging environment,” said Owen Lau, analyst at Oppenheimer.

 

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Last year, rising interest rates and worries of an economic downturn wiped out more than a trillion dollars from the crypto sector. The slump also forced key industry players such as Three Arrows Capital and Celsius Network to shut shop.

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However, the bigger blow came after larger crypto exchange FTX filed for bankruptcy protection in November. Its swift fall has sparked tough regulatory scrutiny of how major exchanges hold user funds.

“We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion,” Coinbase Chief Executive Brian Armstrong said in a blog post.

“We will be shutting down several projects where we have a lower probability of success.”

Click to play video: 'Nova Scotia warns of crypto scams causing ‘unrecoverable’ losses'
Nova Scotia warns of crypto scams causing ‘unrecoverable’ losses

Coinbase said it had no additional comment on the plan.

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The crypto world’s woes have continued this year, marked by plunging deposits, layoffs and multiple legal hurdles.

Coinbase in November cut more than 60 jobs in its recruiting and institutional onboarding teams, after slashing 1,100 jobs,
or 18 per cent of its workforce, in June.

Shares in the company lost roughly 86 per cent of their value last year, in line with the downturn in the fortunes of the sector.

(Reporting by Manya Saini in Bengaluru; Additonal reporting by Niket Nishant; Editing by Saumyadeb Chakrabarty, Shounak Dasgupta and Shinjini Ganguli)

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