Coinbase, the cryptocurrency trading platform, said on Tuesday it would lay off about 20 percent of its employees, its latest move to cut costs as crypto markets plummet and tech companies cut growth expectations.
The company is laying off about 950 people, it said in a memo to staff, after cutting about 1,100 workers in June, also about a fifth of its workforce at the time.
Coinbase CEO Brian Armstrong said in the memo that “in hindsight, we could have cut further” in the layoffs announced last year. He also suggested that the collapse of FTX, which sparked turmoil in the crypto industry, had an impact on Coinbase.
“In 2022, the crypto market moved downward along with the broader macroeconomics,” Mr. Armstrong. “We also saw the impact of unscrupulous actors in the industry, and there may still be further contagion.”
The downturn in crypto has put pressure on companies like Coinbase, which went public in 2021 and expanded rapidly during the pandemic. Bitcoin price is down more than 70 percent from its 2021 peak.
A number of tech companies, including Amazon, Meta and Salesforce, recently announced layoffs, many of which — like Coinbase — said they were hiring too aggressively during a burst of activity in the early stages of the pandemic. Higher interest rates, persistent inflation and other factors that have since slowed the economy have forced many executives to rethink their plans.
Coinbase said the latest cuts were part of a plan to cut costs by 25 percent this quarter. The layoffs would cost between $149 million and $163 million, Coinbase said. The company offers laid-off employees a minimum of 14 weeks of base salary, health insurance and help finding a new job.
Still, Mr. Armstrong said some of the recent developments in the crypto world, including the fall of what he described as “a major competitor”, “could finally bring a lot of benefit to Coinbase”.
