Coinbase, a well-known cryptocurrency exchange, has announced plans to further reduce its costs due to the ongoing crypto winter. The crypto exchange has been negatively affected by the bear market, forcing it to lay off over 18% of its workforce a few months ago to ensure its survival.
The exchange reportedly plans to cut more costs as the crypto winter continues. Brian Armstrong, the CEO of Coinbase, disclosed the exchange’s plans to further reduce its costs.
In an interview, Armstrong noted that the reason for the unstable financial situation of the exchange is the crypto downturn, as previous financial records of the company have been favorable.
“We have this saying internally, I like to repeat a lot, that is, you know, it’s never as good as it seems, it’s never as bad as it seems. I think one of the reasons Coinbase has been so successful over the past 10 years is that we just don’t focus on short-term ups and downs.”
According to Armstrong, some sectors of the exchange, including third-party vendors, marketing, and Amazon Web Services, will all face cost cuts.
Another cost-cutting strategy proposed by Coinbase is to convert a significant portion of its fixed costs into variable costs.
In his interview, he stated,
“I think there will be margin compression, eventually it has to happen at some point because everything we build, you know, others, eventually you’re going to build it, and it’s going to be a little more commercialized. I’d like to go to a place where more than 50% of our revenue comes from subscriptions and services. ”
The value of the exchange’s stock has steadily declined as the crypto winter persists.
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