Around 950 employees have been laid off in the crypto exchange’s attempt to cut spending by 25 per cent this quarter.
Just a week after reaching a $100m settlement with New York regulators, Coinbase has been dealt another heavy blow as it lays off 20 per cent of its employees.
In the second round of widespread job cuts for the crypto exchange, around 950 employees have been laid off, according to CEO Brian Armstrong’s public blog post.
After scaling massively in 2021 – expanding its headcount by 400 per cent – Coinbase ended up cutting 18 per cent of its workforce in June and was left with around 4,700 employees as of the end of September.
The job cuts come as the company aims to cut spending by 25 per cent this quarter, according to Armstrong, after looking at how the company would fare in different conditions.
“As we examined our 2023 scenarios, it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario,” Armstrong wrote.
“While it is always painful to part ways with our fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount.”
He wrote that Coinbase would be shutting down several projects that have a “lower probability of success” as well as reducing the number of employees in the remaining teams.
Reflecting on last June’s job cuts, Armstrong said that, in hindsight, the company “could have cut further” at the time.
Armstrong’s eyes weren’t solely on his own company in his blog post, however, and he made a series of digs at his crypto peers throughout.
“Coinbase is well capitalized, and crypto isn't going anywhere,” he wrote.
“In fact, I believe recent events will ultimately end up benefiting Coinbase greatly (a large competitor failing, emerging regulatory clarity, etc.), and they validate our long term strategy,” Armstrong wrote.
He seemed confident that the infamous demise of its biggest competitor, FTX, would end up helping the company, and peppered the blog with other digs at the “large company”.
Armstrong noted “unscrupulous actors in the industry”, said there could still be “further contagion” and finished by saying that “dark times also weed out bad companies”.
When it comes to the emerging regulatory clarity, hopefully the $50m the company is now required by New York regulators to spend on improving its anti-money laundering programme will help.
“But it will take time for these changes to come to fruition and 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 concluded, explaining the need to reduce Coinbase’s headcount.
Armstrong urged employees to focus on “startup culture” and remember what it’s like to work in “small, nimble teams” that can get more done.
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