It’s been a tough several months for crypto. We’ve seen quite the stalemate in regards to trading trends, this next to no hope in site. Coinbase is feeling the brunt force of the poor market and is subsequently laying off about 20% of its staff.
Adding to the cutbacks, they’ve also announced that they’ll halt development of several projects as the company prepares to weather a treacherous market.
Coinbase is no stranger to dealing with mass layoffs. Just last June, the crypto trading exchange parted ways with approximately 18% of its staff, which amounted to around 1,100 jobs total. This second round of layoffs means that an estimated 980 employees have been let go from the company.
Coinbase co-founder and chief executive Brian Armstrong wrote that there was “no way to reduce our expenses significantly enough, without considering changes to headcount.”
The company is reportedly looking to cut operating expenses by 25% quarter over quarter. Coinbase shares are down 83% over the last 12 months.
Coinbase isn’t the only cyptocurrency exchange looking to downsize. For example, Kranken announced in November that it plans to lay off around 30% of its crew, or about 1,100 people. The crypto market has been hit especially hard by security concerns, the massive rise of inflation, and the recent illegal activities surrounding one of crypto’s heaviest hitters, FTX.
As you likely recall, Sam Bankman-Fried, founder and CEO of FTX, was arrested in the Bahamas right before Christmas. He was accused of defrauding investors in a brazen, multi-year scheme that ended when FTX filed bankruptcy in November. He was being held to $250 million, the highest in history, before his attorneys negotiated for a deal that included his parents co-signing the bail deal and posting their home as collateral.
Coinbase’s CEO Armstrong’s statement went on to say, “Dark times also weed out bad companies, as we’re seeing right now. But those of us who believe in crypto will keep building great products and increasing economic freedom in the world. Better days are ahead, and when they arrive, we’ll be ready. Thank you for everything you’ve done to get us this far, and everything you will do to carry us forward.”
In crypto, the saying goes, “buy the dip,” but the true question is, “how low can you go?” market experts are leery to predict the next uptick in the market and only time will tell if conditions will improve or if another round of layoffs is lies ahead.