Coinbase is laying off an additional 20% of its employees
Coinbase, the cryptocurrency trading platform, announced on Tuesday that it would lay off about 20% of its employees, its latest move aimed at cutting costs as crypto markets decline and tech companies lower expectations for growth.
The company is laying off about 950 people, it said in a memo to staff, which comes after it laid off about 1,100 employees in June, also about a fifth of its workforce at the time.
Brian Armstrong, chief executive of Coinbase, said in the memo that “in hindsight, we could have reduced more” the layoffs announced last year. He also hinted that the collapse of FTX, which caused a stir in the crypto industry, was impacting Coinbase.
“In 2022, the crypto market trended lower along with the broader macro economy,” Armstrong wrote. “We’ve also seen the fallout from unscrupulous players in the industry, and there could still be further contagion.”
The crypto downturn has put pressure on companies like Coinbase, which went public in 2021 and has grown rapidly during the pandemic. Bitcoin price has fallen over 70% from its 2021 peak.
A number of tech companies, including Amazon, Meta and Salesforce, have recently announced layoffs, with many – like Coinbase – saying they hired too aggressively during a burst of business at the start of the pandemic. Higher interest rates, stubborn inflation and other factors that have slowed the economy since then have forced many leaders to rethink their plans.
Coinbase said its latest cuts are part of a plan to cut costs by 25% this quarter. The layoffs would cost between $149 million and $163 million, Coinbase said. The company offers laid-off employees at least 14 weeks of base salary, health insurance and assistance in finding a future job.
Still, Armstrong said some of the recent developments in the crypto world, including the downfall of what he described as “a major competitor,” could “end up benefiting Coinbase greatly.”