Coinbase Global intends to cut 20% of its employees and implement significant cost reductions. This is the cryptocurrency industry’s latest indication of distress.
Coinbase, the cryptocurrency exchange, plans to cut operating costs by 25% in the current quarter, according to CEO Brian Armstrong. Around 950 people will be laid off as a result of this. The firm employed roughly 4,700 people by the end of September.
It All Snowballed with The SBF Drama
A new round of layoffs has resulted from the collapse of competitor exchange FTX. Last week, Genesis, a crypto-lending firm, fired about a third of its employees. Huobi, a cryptocurrency exchange, has also announced plans to lay off about one-fifth of its employees. After the collapse of two sister cryptocurrencies last summer, digital-asset firms such as Coinbase laid off employees. Lastly, the value of coins was destroyed by a crypto hedge fund.
Those who were laid off will be notified on Tuesday, according to Mr. Armstrong. In addition, they will be paid at least 14 weeks’ salary.
Mr. Armstrong stated that he’s still optimistic about the future and the future of crypto, despite everything that has been happening in the company and the industry.
According to a Securities and Exchange Commission document, the layoffs are part of a restructuring plan that Coinbase intends to finish by the second quarter. Coinbase expects total restructuring expenses of $149M to $163M, with $58M to $68M in workers’ severance benefits.
Not a Good Start to The Year for Coinbase
For allowing customers to open accounts with insufficient background checks, Coinbase’s US unit agreed to pay a $100M settlement with New York regulators.
Coinbase said it has agreed with the New York State Department of Financial Services. It requires the company to pay a $50M fine and improve compliance for two years with an additional $50M. Coinbase shares fell 2% in early morning trading.