Coinbase just announced it is laying off 25% of its staff amid broader cuts in the crypto industry

Coinbase announced on Tuesday that it would lay off about 25% of its staff, roughly 950 people. The cuts come amid a prolonged bear market for crypto and the collapse of major companies like FTX, with CEO Brian Armstrong write a blog post which may still have more infections after the turbulent past months.

Coinbase has long positioned itself as a rule-following player in the crowded landscape of renegade crypto companies, bolstered by quarterly reports as one of the few publicly traded centralized exchanges.

Last week, the New York Department of Financial Services Office has partnered it reached a $100 million settlement with Coinbase over failures in the exchange’s compliance program, which some observers taken as a sign that it is committed to long-term regulation.

Despite Coinbase’s efforts, Crypto Winter has hit the company hard — shares are down nearly 90% since November 2021, and the exchange posted weak third-quarter earnings in November, including a net decline which is about 28%.

One of its bright spots is the company’s holdings in USDC, a stablecoin pegged to the US dollar, owned by Coinbase through a consortium with Circle. Due to the increase in interest rates, Coinbase was able to collect income on assets, with “interest income” increasing to $101.8 million in the third quarter of 2022, from $32.5 million in the previous quarter.

Layoffs follow economic turmoil. In May, while the collapse of TerraUSD shook the crypto landscape, Coinbase Office has partnered it slows down the hiring afterwards informed it will triple the numbers as recently as February. In June, the company Deposed close to 1,100 employees, then equal to almost 18% of its workforce, with Armstrong admitting that the exchange has grown rapidly.

Armstrong acknowledged the current economic headwinds in Tuesday’s blog post, writing that tech companies have become too focused on headcount growth as a measure of success.

“Especially in this economic climate, it’s important to shift our focus to operational efficiency,” he said.

Layoffs spread throughout the industry. In December, CoinDesk reported that more than 26,000 jobs will be lost by 2022, and the trend will continue until 2023. On January 5, Reuters reported that crypto firm Genesis cut 30% of its workforce and crypto-focused bank Silvergate laid off 40% of its staff.

Learn how to navigate and build trust in your business with The Trust Factor, a weekly newsletter that explores what leaders need to succeed. Sign up here.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *