Coinbase, the largest cryptocurrency exchange in the U.S., has announced plans to lay off 950 employees, or approximately 20% of its workforce, and many projects as it seeks to lower costs to improve its chances of success under all circumstances.
In response to the ongoing crypto winter, Coinbase CEO Brian Armstrong announced that the company would lay off 950 employees as part of its efforts to reduce operating costs by approximately 25%.
Armstrong stated:
“I’ve made the difficult decision to reduce our operating expense(1) by about 25% Q/Q, which includes letting go of about 950 people(2). All impacted team members will be informed by today.”
This is the cryptocurrency exchange’s second major layoff since it cut 18% of its workforce, or nearly 1,100 jobs, last June.
Armstrong explained that there was no way to significantly reduce their expenses without considering changes to headcount.
Brian added:
“I also want to be clear that, while some of the factors that have brought us to this point are beyond our control, accountability rests with me as the CEO. We also reduced headcount last year as the market started to correct, and in hindsight, we could have cut further at that time.”
Coinbase anticipates spending between $149 million and $163 million as part of its restructuring plan to lower operating costs, including between $58 million and $68 million in cash charges for employee compensation and other termination payments.
According to the report, by the second quarter of 2023, Coinbase anticipates that the plan will have been substantially implemented.
In response to the rising regulatory clarity and new opportunities open to Coinbase as a result of FTX’s collapse, Armstrong stated that he believes recent events will ultimately significantly benefit Coinbase.
Armstrong believes that these changes will take time, so they must ensure that they have the necessary operational capabilities to withstand downturns in the cryptocurrency market and seize any opportunities that may arise.
Coinbase announced a $100 million settlement with the New York Department of Financial Services (NYDFS) earlier this week, resulting in a 12% increase in the company’s stock price.
Due to inadequacies in its compliance procedures, Coinbase will pay a $50 million fine to the State of New York for violating the New York Banking Law and the Department of Financial Services (DFS) regulations on virtual currencies, money transmitters, transaction monitoring, and cybersecurity.
If you would like to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, and Instagram.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
