The corporate plans to let go 950 staff, with its CEO citing a troublesome crypto market and ‘the fallout from unscrupulous actors within the business.’
Cryptocurrency change Coinbase is the newest tech firm to announce mass layoffs. In an electronic mail to workers on Tuesday, CEO Mind Armstrong stated the corporate could be letting 950 staff go because it makes an attempt to “climate downturns within the crypto market.” The e-mail was made public on the Coinbase blog, and the corporate additionally submitted an 8-K filing with the news.
In a not-so-subtle reference to the collapse of major cryptocurrency player FTX, who’s former CEO Sam Bankman-Fried has subsequently been charged with money laundering and fraud, Armstrong cited “the fallout from unscrupulous actors within the business” as one of many causes fueling Coinbase’s cost-cutting efforts. Armstrong says the layoffs are a part of a plan to scale back Coinbase’s working bills by 25 % on a quarter-over-quarter foundation.
“Whereas it’s at all times painful to half methods with our fellow colleagues, there was no method to cut back our bills considerably sufficient, with out contemplating modifications to headcount,” Armstrong wrote in his memo. Workers within the US will obtain a minimal of 14 weeks base pay plus two extra weeks per 12 months spent on the firm. Affected staff will obtain an electronic mail right this moment.
“The FTX collapse and the ensuing contagion has created a black eye for the business,” Armstrong told CNBC, and instructed that extra ache could also be but to come back. “We could not have seen the final of it — there might be elevated scrutiny on numerous firms within the house to guarantee that they’re following the foundations… Long run that’s an excellent factor. However brief time period, there’s nonetheless loads of market worry.”
Coinbase’s layoffs come amidst a broader downturn within the crypto market. The worth of Bitcoin has plummeted in current months, and is down round 58 % over the previous 12 months in line with CNBC. Coinbase’s shares have trended in an identical course since going public in April 2021. Its inventory is buying and selling at below $40, down from a excessive of over $340 in 2021.
Exterior of the crypto business, a number of main tech firms have been decreasing headcounts in an try to climate the present financial downturn. Amazon announced layoffs affecting 18,000 employees final week, Meta laid off 11,000 employees in November, and Twitter’s headcount has been cut by greater than half following Tesla CEO Elon Musk’s chaotic acquisition of the social media community.