Coinbase Global (Nasdaq: COIN) is preparing to lay off even more employees, in an effort to save cash amid a broader crypto downturn.
In a blog post published Tuesday, CEO Brian Armstrong announced Coinbase is letting go another 950 employees, amounting to about 20% of the company’s workforce. He said the move was necessary in order to preserve the crypto exchange’s financial wellbeing after expanding too quickly during the bull market. “This is the first time we’ve seen a crypto cycle coincide with a broader economic downturn,” he wrote in a blogpost. The latest cutback comes on top of an earlier 18% reduction in the company’s headcount back in June, followed by the elimination of another 60 jobs in November.
“With perfect hindsight, looking back, we should have done more,” Armstrong said in a followup phone interview with CNBC. “The best you can do is react quickly once information becomes available, and that’s what we’re doing in this case.” As a result of the layoffs, Coinbase is expecting to incur between $149 million and $163 million in new expenses in the first quarter ending in March, while its operating expenses are slated to drop 25%, as per a newly-released regulatory filing. Earlier, Coinbase said its revenue will be cut in half in 2022, with expectations of lower trading volume going forward.
Coinbase hasn’t been faring too well in the crypto space as of late. Not only are the company’s shares down over 85% over the past 12 months, but Coinbase has to pay $50 million to settle anti-money-laundering violations with the New York State Department of Financial Services, and another $50 million to bolster its internal “know-your-customer” controls after regulators discovered the crypto exchange repeatedly failed to conduct adequate background checks on its users.
Coinbase Global last traded at $43.23 on the Nasdaq.
Information for this briefing was found via Coinbase and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
The Grocery Grift: Why Toronto and New York Are About to Light Taxpayer Money on Fire