Coinbase cutting 20% of workforce
Coinbase cut 18% of its global workforce in June 2022
Layoffs are a great excuse to fire poor performers: Tom Gimbel
LaSalle Network founder and CEO Tom Gimbel analyzes the health of the jobs market after layoffs on Wall Street and in the tech sector on 'Cavuto: Coast to Coast.'
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).
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| COIN | COINBASE GLOBAL INC. | 295.23 | -24.78 | -7.74% |
"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.
Brian Armstrong, CEO and Co-Founder of Coinbase, speaks at the 2022 Milken Institute Global Conference in Beverly Hills, California, U.S., May 2, 2022. (REUTERS/David Swanson / Reuters Photos)
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
Coinbase employee Daniel Huynh holds a celebratory bottle of champagne as he photographs outside the Nasdaq MarketSite, in New York's Times Square, Wednesday, April 14, 2021. (AP Photo/Richard Drew) / AP Newsroom)
"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.