Coinbase to Laying off 20% of its workforce
Nasdaq-listed Coinbase Global Inc restructuring plans feature a 20% headcount reduction in an attempt to navigate the bear market. The American crypto exchange emphasizes that laying off 950 employees will minimize operational costs, thereby improving its operating efficiency amidst the prolonged bear market.
Second Wave Layoff
The January 10 announcement by Coinbase chief executive Brian Armstrong cited the crypto winter as the reason for the kickstarting 2023 with headcount reduction. The official statement indicated the crypto exchange platform would let go of 20% of its staff.
Armstrong noted that the second wave of job cuts targets 950 employees within the projects portraying a lower likelihood of success given the ongoing crypto winter. Unlike the 18% headcount reduction undertaken in June 2022 to overcome the looming economic recession, the Coinbase executive indicated this layoff targets to lower the operating costs by 25%.
Nonetheless, Armstrong dismissed speculations that Coinbase capitalization was waning as a reason for the second wave of layoffs. He added that the layoffs would deliver the desired operational efficiency. He regretted that Coinbase would terminate projects that portrayed a decreased probability of success.
Accomplishing Operational Efficiency
Armstrong was noncommittal about the projects Coinbase will terminate. Instead, he expressed optimism about the layoff and shutting down of several projects yielding operational efficiency that he admitted became elusive amid the prevailing crypto winter.
Armstrong lauded the adoption of regulatory clarity by various jurisdictions as favorable to Coinbase’s existing projects. Although admitting the collapse of FTX brought numerous opportunities for Coinbase, he lamented that such would take longer to bear fruits.
Nevertheless, he emphasized the need for Coinbase to realize operational efficiency to navigate the downturns attributed to the current crypto winter. He observed that accomplishing operational efficiency would enable Coinbase to exploit opportunities as they emerge proactively.
Layoff Contributing Huge Outlay
Coinbase update shared via the official blog echoed its form 8-K filing to the SEC, confirming the nonavailability of its 2022 audited financial statements.
It added that the restructuring would lower the operating costs despite projecting its expenditure to hover between $149 million to $163 million. However, it estimated the employee severance and termination benefits to range between $58 million and $68 million.
The filing disclosed that Coinbase plans to complete the execution of the restructuring by the second quarter.
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