Coinbase Fires 950 Employees in Order to Cut Operating Costs
On January 10, Coinbase CEO Brian Armstrong announces plans to reduce an additional 20% of its workforce.
The decision was made to manage operating expenses amid the ongoing bear market.
Last year in June, Coinbase laid off 18% of its workforce, and the latest move will result in the layoff of an additional 950 employees.
Moreover, the company also plans to terminate some projects with a low probability of success.
Employee Count: As of the end of September 2022, Coinbase employed 4,7
On January 10, Coinbase CEO Brian Armstrong announces plans to
Reduce an additional 20% of its workforce. The decision was made to manage operating expenses amid the ongoing bear market.
Last year in June, Coinbase laid off 18% of its workforce, and the latest move will result in the layoff of an additional 950 employees. As per reports, the crypto exchange had 4,700 employees at the end of September 2022.
Employees who were affected were notified through email to their personal accounts. Coinbase provides a complete package to assist terminated employees. US-based employees will get a minimum of 14 weeks of basic pay, health insurance, and other perks.
Additionally, the company intends to provide additional transition support to impacted employees on a work visa. The company officials noted,
“We're also offering everyone access to our Talent Hub, which can help you find your next job. Employees at Coinbase are among the most talented in the world, and I'm confident that your abilities and expertise will stand out even in a competitive job market.”
In addition, the company also plans to terminate some projects with a low probability of success. The remaining projects will continue to run as usual, but with a reduced workforce.
However, the announcement comes as good news for Coinbase stockholders. In Tuesday's trading session, the COIN stock price increased 14.5% to $43.25.
Coinbase’s Trust Company Gains Traction in Bear Market
Despite its cost-cutting efforts, Coinbase has been expanding its crypto custodian business through a separate entity known as Coinbase Trust Company.
Last year, Coinbase Trust was named the crypto custodian of BlackRock, the world's largest asset manager. Recently, the company also collaborated with Ondo Finance, a decentralized investing platform, to develop a stablecoin investment fund.
While it is unclear how much Coinbase made through institutional custodial services in 2022. As per reports, the company earned $136.1 million in 2021, accounting for approximately 0.06% of the assets on its platform.
This creates a buzz in the crypto market because, on the one hand, the company is making significant profits and, on the other hand, the company is engaging in its third round of firing in six months.
What do you think is the reason behind the massive layoffs? Is the company experiencing a liquidity crisis as a result of the FTX fallout? Please share your valuable thoughts in the comment section below.
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