Coinbase is reported to be laying off roughly one-fifth of its workforce as it wants to keep cash flowing during the crypto market downturn.
The exchange plans to cut 950 jobs, according to the official website. Coinbase, which had about 4,700 workers at the end of September, reduced its workforce 18% last June to accommodate boarding.
"With hindsight, we should have cut jobs even more," Chief Executive Officer Brian Armstrong said during one of his media bragging sessions. "The best we can do is respond quickly as soon as information becomes available, and that's what we did in this case."
Coinbase said the move would result in new spending of between $149 million and $163 million for the first quarter. The layoff, along with other restructuring measures, will lower Coinbase's operating expenses by 25% for the quarter ending in March.
After looking at the various pressure tests for Coinbase's annual results, Armstrong said, “it became clear that we needed to spend less to increase our chances of navigating each challenge. The company will also close some projects that have a "lower probability of success."
The cryptocurrency market has been rocked by a chain of issues in recent months following the fall of one of the industry's biggest players, FTX.
“The FTX crash and the resulting impact has created a dark episode for the industry.” he said, adding to the possibility that more "industry players will fall."
Cryptocurrencies have impressed tech stocks as investors fled risk assets amid the broader economic downturn. Bitcoin is down 58% in the last year, while Coinbase shares are down more than 83%.
Coinbase's image joins another collection of tech companies that are cutting jobs after working hard to increase workers during the pandemic. Last week, Amazon said it would cut 18,000 jobs when Salesforce shed more than 7,000, or 10% of jobs. Elon Musk also cut roughly half of Twitter's workforce after assuming the helm as Chief Executive Officer last year.
