Major cryptocurrency exchange Coinbase has announced its third round of layoffs amid the ongoing bear market, reducing its headcount by a total of 950 employees, or 20% of its workforce.
In a letter to employees today, CEO and Co-Founder Brian Armstrong said they made the decision in order to make sure they “have the appropriate operational efficiency to weather downturns in the crypto market.” He added that the decision will help the company reduce operating costs by 25% compared to the latest quarter.
Armstrong said he reached the decision after examining different scenarios for the crypto market in 2023, including bull, base, and bear. Subsequently, the crypto boss said they had to let go of some of their employees. He said:
“As we examined our 2023 scenarios, it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario. While it is always painful to part ways with our fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount.”
The CEO also mentioned that they will be shutting down some projects that have a lower probability of success.
Coinbase is among the many crypto companies that have been hit hard by the recent crypto meltdown that has seen around $2 trillion wiped out of the market. The price of Bitcoin, the world’s largest cryptocurrency, has dropped to $17,000 after peaking near $65,000 in late 2021.
Coinbase first began shedding jobs in June last year. At the time, the crypto company said it had “grown too quickly” and needed to scale down in a bid to weather the crypto winter, laying off 1,100 employees, representing approximately 18% of its global workforce.
In early November, amid raging crypto winter, Coinbase laid off another 60 people to trim costs. “We are diligently focused on cost optimization and cash management,” the exchange said in its third-quarter earnings report.
Meanwhile, shares of Coinbase, which went public in April 2021 and hit an all-time high of around $370, have since taken a nosedive, losing almost 90% of its value compared to all-time highs. The company’s shares ended the latest trading day on Monday at $38.27, up by more than 15%.
Aside from Coinbase, almost all other major crypto exchanges have also announced layoffs. Meanwhile, some high-profile crypto platforms, including FTX, have gone belly up, further exacerbating the crypto market crash.
Notably, in another blow to Coinbase, the exchange has agreed to shell out a total of $100 million to settle a complaint relating to “certain historical shortcomings” in its regulatory compliance work.