Coinbase announced plans to lay off about 18% of the company's workforce to lower costs ahead of a potential recession, joining other tech firms in downsizing staffing levels as stocks and cryptocurrencies plunge deeper into bear market territory.
Tuesday, Coinbase said it plans to layoff approximately 1,100 employees in response to"current market conditions and ongoing business prioritization efforts.”in a blog post Tuesday, adding that labor costs have grown"too high to effectively manage this uncertain market" and warning the economy"appear[s]The firm said U.S. employees affected by the layoffs will be terminated Tuesday, and that it will “follow applicable local guidelines” for non-U.S.
Departing employees will receive at least 14 weeks of severance, four months of health insurance and job-search resources, the company said, estimating it will incur about $40 million to $45 million in restructuring expenses related to the termination benefits.plunging crypto prices and volatility that began late last year “directly impacted” first-quarter financials and pushed trading volume down to $309 billion —resulting in the firm's first quarterly loss as a publicly traded company.
Coinbase stock fell 6% in pre-market trading after the announcement and has collapsed more than 85% from a closing high in November.“Down markets are challenging to navigate and require a different mindset… A recession could lead to another crypto winter, and could last for an extended period,” Armstrong, whose fortunepegs at $2.2 billion, said Tuesday, noting that trading revenue has declined significantly during past periods of crypto-market weakness.
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