Coinbase laid off almost a thousand more employees
The head of the exchange announced the need to reduce the operating costs of the floating exchange by 25%.
Coinbase has laid off another 950 employees, the exchange's head Brian Armstrong announced in a blog post. He said that in order for the company to weather the downturn in the crypto market and maintain proper operational efficiency, he made the difficult decision to cut the exchange's operating expenses by about 25% this quarter, which includes cutting staff.
Coinbase had already made cuts in June 2022. The exchange laid off about 1,100 people (18% of employees) to maintain business stability during the economic downturn. At that time, about 5,000 people remained in the team of the American cryptocurrency exchange. The current reduction implies the dismissal of about 19% of the staff.
After considering the exchange's 2023 operating scenarios, it became clear that Coinbase would need to cut costs, which would be impossible to do without changes in headcount, according to the report. In addition, the platform will close several projects in which it has "less chance of success."
Addressing employees not affected by the layoffs, Armstrong stressed that in the current economic climate, it will be especially important to shift the focus to operational efficiency. He also noted that recent events in the industry would ultimately benefit Coinbase greatly by leading to the failure of a major competitor and regulatory clarity.
Nevertheless, the aftermath of the FTX collapse is still negatively affecting Coinbase's business. Investor distrust caused by the bankruptcy of a major competitor has led to the exchange's revenues expected to halve or more in 2022. Armstrong said Coinbase had about $7 billion in revenue in 2021, and he estimated it would drop to about $3.2 billion last year.
The general downturn in the crypto industry is forcing other members of the industry to cut costs and cut teams as well. For example, Huobi this week confirmed plans to lay off up to 20% of its employees. In all, cryptocurrencies have laid off at least 10,000 employees in 2022.