Coinbase Continues Mass Layoffs of Employees

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The largest cryptocurrency exchange in the United States, coinbaseannounced its third round of layoffs in the middle of the crypto winter, cutting its workforce by 20%, with almost 1,000 people losing their jobs.

The total number of employees Coinbase is laying off is around 950 people. Brian Armstrong, the company’s CEO and co-founder, apologized for the move in a article published in the official blog of the exchange this Tuesday (10).

“I made the difficult decision to reduce our operating costs by about 25%, which includes laying off about 950 people. All affected team members will be notified today. […] I also want to make it clear that while some of the factors that brought us here are beyond our control, the responsibility rests with me as CEO.”

Armstrong added that the laid off employees had already been blocked from accessing Coinbase’s internal systems. The change, he said, was a way to protect customer information.

As with the last round of layoffs, the exchange said it will provide a “full” package of benefits to support those affected, regardless of their geographic location. One of them is to help laid off employees in their search for new jobs.

These benefits, according to the company, include a base salary of 14 weeks, health insurance and other unspecified for employees who live in the United States.

Brian Armstrong, CEO and Co-Founder of Coinbase.com

FTX Ripple Effect

The Coinbase CEO also said that he decided to lay off employees after examining different scenarios for the cryptocurrency market in 2023, including bullish and bearish forecasts.

“Looking at our 2023 scenarios, it became clear that we would need to reduce expenses to increase our chances of getting it right in all scenarios. While it is always painful to be separated from our colleagues, there was no way we could significantly reduce our expenses without considering staff changes.”

The most significant factor influencing this decision was the collapse of the FTX exchange, a company that filed for bankruptcy at the end of 2022negatively impacting many projects.

Coinbase said that it expects other companies to be affected by the FTX scandal in the coming months.

Despite this, Armstrong claimed that these bankruptcies will ultimately benefit his exchange. Therefore, he believes that FTX users and other trading companies affected by the FTX crash will migrate to other exchanges like Coinbase. However, only time will tell if that will happen.

Cryptocurrency companies lost up to 60% of their employees

Hoping to stay alive, several companies responded to the cryptocurrency winter by reducing their workforce, resulting in a sequence of mass layoffs, affecting companies large and small.

It is estimated that at least 10 thousand people lost their jobs in cryptocurrency companies in 2022 alone. So, it is easy to understand that 2022 was a brutal year for cryptocurrency companies and especially for employees.

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