According to a blog post published Tuesday morning, Coinbase is cutting down around one-fifth of its workforce as its looks to save some cash during the downfall of the crypto market. The blog post suggests that the exchange plans to cut down 950 jobs, which had roughly 9,700 employees at the end of September. They have already slashed about 20 per cent of their workforce in June, citing that they need to manage their costs and grow too quickly during the bull run.
Job cutting will save Coinbase millions of dollars
In a phone interview, Coinbase’s CEO Brian Armstrong told CNBC that with perfect hindsight, looking back, they should have done more. They think that the best thing one can do is to react once information becomes available, and that’s what they are doing in this case.
According to a new regulatory filing, Coinbase said that this decision would help to result in new expenses of between 149 million USD and 163 million USD. The layoffs, including the other restructuring measures, will help Coinbase to reduce their operating expenses by 25 per cent for the first quarter of this year. The crypto company also stated that they are expecting to adjust their EBITDA losses.
After looking at the various stress tests for the annual revenue of Coinbase, Armstrong said that it became clear that they need to reduce their expenses to increase their chances of doing well in the upcoming time. He also stated that it would shut down several projects with a lower possibility of success.
End of a growth era
Coinbase is cutting around one-fifth of its workspace to reduce its operating expenses. By doing so, it has joined the chorus of other tech companies cutting jobs after going on a hiring bridge during the covid. Last week, the biggest e-commerce platform in the world, Amazon, said that they would cut down 18,000 jobs, more than the online retailer initially estimated last year, while Salesforce reduced its workforce by 10 per cent.
Elon Musk slashed around half of Twitter’s headcount after becoming the company’s CEO. Meta and some crypto companies like Genesis, Kraken and many others have also reduced their workforce. According to Armstrong, one of the biggest reasons companies are doing so is that they are now focusing on reducing their operational cost instead of growth.
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