Coinbase Announces Plan to Dismiss 950 Workers
A cryptocurrency exchange, Coinbase Global said in a regulatory filing Tuesday that it plans to cut about 950 jobs as part of efforts to manage its operating expenses. The restructuring plan is expected to be substantially completed by Q2, the company said.
The cryptocurrency exchange cut its headcount by about 18% last year. It expects to incur about $149 million to $163 million in total restructuring expenses, according to the filing. This includes about $58 million to $68 million in cash charges related to employee severance and other termination benefits.
The company expects to recognize substantially all of these charges in Q1. Separately, Coinbase said it expects average annual monthly transacting users, average transaction revenue per user, subscription and services revenue, and certain operating expenses for the full year of 2022 to be consistent with the outlook that was provided with Q3 results.
In a blog post published Tuesday, Coinbase Chief Executive Brian Armstrong said the crypto industry has been hit by “fallout from unscrupulous actors.” He warned that “there could still be further contagion.”
“We need to make sure we have the appropriate operational efficiency to weather downturns in the crypto market, and capture opportunities that may emerge,” he said.
As of the end of September, Coinbase had about 4,700 employees, up almost 70% from a year earlier, according to a shareholder letter. The latest round of layoffs would affect about 20% of staff, based on that count.
Mr. Armstrong acknowledged the company’s round of layoffs in 2022.
“In hindsight, we could have cut further at that time,” he said. “While some of the factors that have brought us to this point are beyond our control, accountability rests with me as the CEO.”
The company expects operating costs to fall by about 25% from a year ago in the quarter ending March 31, Coinbase said in a securities filing. The company said it expects to incur about $149 million to $163 million as part of a restructuring plan meant to cut costs.
Armstrong said the company will exit some projects that “have a lower probability of success,” and that teams on other projects will continue to operate with fewer employees. The company remains well capitalized, Mr. Armstrong said, “and crypto isn’t going anywhere.”
“Over the last decade, Coinbase has made it through multiple bear markets using this process,” he said. “This is the first time we’ve seen a crypto cycle coincide with a broader economic downturn, but otherwise it is similar.” # Coinbase Announces Plan to Dismiss 950 Workers
