Key takeaways:
- Coinbase is reducing its headcount by 950 workers, 20% of the entire workforce
- The exchange is making cuts to weather the crypto winter and broader economic downturn
- Coinbase stock gained 13% after the announcement
Coinbase to lay off 950 workers as it shifts to “operational efficiency” to weather poor economic conditions
In a letter to its employees on Tuesday, Coinbase CEO Brian Armstrong said that the exchange is meeting the broader macroeconomic downturn with a 25% reduction in operating costs, which includes laying off 950 workers, about 20% of the entire workforce.
Armstrong assured Coinbase employees and shareholders that the recent events (collapse of FTX, crypto and macroeconomic downturn) would end up benefiting the company in the long term.
“Coinbase is well capitalized, and crypto isn’t going anywhere. In fact, I believe recent events will ultimately end up benefiting Coinbase greatly (a large competitor failing, emerging regulatory clarity, etc.), and they validate our long term strategy.”
Armstrong added that the exchange needs to have the “appropriate operational efficiency” so it can leverage any potential opportunities that may arise in the future. However, he doesn’t discredit the possibility of “further contagion” within the crypto market and global economy.
The CEO also noted that Coinbase had undergone several crypto bear markets before the latest one, to which it always responded by tightening its operational expenses.
Due to the reduced headcount, Coinbase will be shutting down several projects and decreasing the number of people on multiple other projects. The full details of what this entails will become available to the public in the exchange’s Q4 earning call next month.
The market responded to layoff news with a bullish move as Coinbase stock (COIN) grew an additional 13% on Tuesday to increase the 5-day green candle to 25%.
It is worth noting that the tech sector has been making severe job cuts in the past couple of months, with the likes of Meta, Amazon, Twitter, Tesla, and Google laying off 150,000 workers.
