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Saturday, February 4, 2023

Coinbase announced that it will cut 20% of its workforce to resist the crypto collapse

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coinbase It said the measure would generate new expenses of between $149 million and $163 million for the first quarter. The layoffs, along with other restructuring measures, will cut Coinbase’s operating expenses by 25% for the quarter ending in March, according to a new regulatory document. The cryptocurrency company also said it expects full-year adjusted EBITDA losses to be within a previous “rail” of $500 million set last year.

After looking at various stress tests for Coinbase’s annual revenue, Armstrong said, “it became clear that we would need to reduce expenses to increase our chances of doing well in all scenarios” and there was “no way” to do that without reducing the number of employees. . The company will also close several projects with a “lower probability of success.”

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Cryptocurrency markets have been rocked in recent months following the collapse of one of the biggest players in the industry, FTX. Armstrong pointed to those consequences and the increasing pressure on the sector thanks to “unscrupulous players in the industry,” referring to FTX and its founder, Sam Bankman-Fried.

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“The collapse of FTX and the resulting contagion has created a black eye for the industry”he said, adding that there are likely more “shoes to drop.”

“We may not have seen the last — there will be increased scrutiny of various companies in the space to make sure they are following the rules,” Armstrong said. “In the long run that’s a good thing. But in the short term, there is still a lot of fear in the market.”

Cryptocurrencies have suffered along with tech stocks as investors flee riskier assets amid a broader economic downturn. Bitcoin is down 58% in the past year, while Coinbase shares are down more than 83%.

End of growth?

Coinbase joins, in this way, the decision of other technology companies that reduce their workforce after a wave of hiring during the coronavirus pandemic. Last week, Amazon said it would cut 18,000 jobs while Salesforce cut the number of employees by more than 7,000. Elon Musk cut half of the workforce at Twitter after taking over as chief executive while Meta cut more than 11,000 positions. Crypto companies Genesis, Gemini and Kraken have also reduced their workforce.

Source: Ambito

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