Coinbase lays off about 20% of its workforce due to the crypto crisis: NPR

Coinbase said it will lay off around 20% of its employees.

Richard Drew/AP

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Richard Drew/AP

Coinbase said it will lay off around 20% of its employees.

Richard Drew/AP

Cryptocurrency exchange platform Coinbase is laying off 950 employees, about 20% of its workforce, due to the continued downturn in the cryptocurrency market and the broader economy, the company announced. This latest round of job cuts comes after the company laid off about 1,100 people in June.

Coinbase said it had about 4,700 employees in September following cuts it made early last year. But the first round of layoffs wasn’t enough to keep the company in good financial shape during an ongoing crypto winter, Coinbase CEO and co-founder Brian Armstrong said in a blog post.

The past year has been extremely volatile for the crypto space. Bitcoin is currently more than 70% down from its all-time high it made in November 2021. And several cryptocurrency firms, including BlockFi, Celsius, and scandal-plagued cryptocurrency exchange FTX, all crashed in 2022. Its founder Sam Bankman-Fried is now facing several criminal charges.

“As we looked at our 2023 scenarios, it became clear that we needed to cut expenses to increase our chances of doing well in each scenario. While it’s always painful to part ways with our colleagues, there was no way we could cut our expenses so significant enough, without considering the headcount changes,” Armstrong wrote.

As part of the force reduction, Coinbase is also “shutting down several projects where we have a lower likelihood of success,” Armstrong added.

Armstrong also blamed “unscrupulous industry players” for volatility and “contagion” in the market – a veiled jab at FTX, formerly one of the biggest players in the crypto space.

“Coinbase is well capitalized, and cryptocurrencies aren’t going anywhere. In fact, I believe recent events will ultimately ultimately benefit Coinbase greatly (large competitor go bust, emerging regulatory clarity, etc.) and validate our strategy for the long haul. term,” wrote Armstrong. But it will take time to unfold, he added.

U.S. employees who were laid off will receive a minimum of 14 weeks of base pay (with an additional two weeks per year worked), health insurance and other benefits, the company said. “Transition support” will also be provided to affected employees who have work visas, Armstrong said.

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