The largest American trading platform Coinbase begins the year with another staff reduction. The exchange will lay off 950 employees to survive the prolonged bear market.
The new year did not bring good news for the cryptos, so in the first days of January, crypto startups were covered by a wave of layoffs. Today Coinbase CEO Brian Armstrong announcedthat his company plans to cut its costs by 25% by laying off 20% of its staff.
Armstrong stressed that Coinbase is firmly on its feet and cryptocurrencies are “not going anywhere,” but the firm must continue layoffs to maintain “proper operational efficiency.” Coinbase will shut down several failed projects, the CEO noted. However, layoffs are not cheap entertainment. The company will spend at least $149 million on severance pay and other benefits.
In early December, Armstrong admitted that Coinbase could be missing half of its 2022 revenue. Coinbase tried to take advantage of the FTX collapse to present itself as a trustworthy trading platform that is fully regulated and transparent. Less than a week after FTX filed for bankruptcy, Coinbase ran an ad in The Wall Street Journal that read, “Trust us.” It also said that millions of people have recently entrusted their funds to someone who did not deserve it. However, even such a desperate move did not prevent Coinbase shares from falling by 17%.
At the same time, Armstrong views the tightening of regulation in connection with the collapse of FTX rather positively: “I really believe that recent events will ultimately benefit Coinbase a lot.”
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