Coinbase to cut another 20% of its workforce in the second wave of layoffs

Leading cryptocurrency exchange Coinbase will begin further layoffs in 2023, letting go another 20% of its workforce in a second big wave of layoffs.

Coinbase CEO Brian Armstrong Officially Announced announced On January 10, Coinbase announced it would cut 950 jobs as part of a move to reduce the company’s operating costs by about 25% as the crypto winter continues.

Armstrong stressed that Coinbase is “rich in capital” and that cryptocurrencies are “going nowhere,” but the company must proceed with layoffs to maintain “adequate operational efficiency.” As part of the job cuts, Coinbase plans to close several projects with a “low chance of success,” the CEO said, though he did not specify exactly which ones.

“In fact, I believe recent events will ultimately benefit Coinbase significantly,” said Armstrong, referring to the regulatory clarification and opportunities for Coinbase due to the FTX failure. he added:

“However, these changes will take time to bear fruit. We need to ensure adequate operational efficiencies to weather the crypto market downturn and seize opportunities that may emerge.”

Coinbase’s blog announcement is accompanied by the 8k form the company files with the U.S. Securities and Exchange Commission. State Coinbase’s audited financial statements for 2022 are not yet available.

As part of its restructuring plan to reduce operating costs, Coinbase will reduce cash costs from approximately $149 million to $68 million, including $58 million to $68 million in cash costs related to employee severance and other termination benefits. We expect to spend $163 million. The company expects execution of the plan to be substantially completed by the second quarter of 2023.

The latest layoffs come months after Coinbase first cut its workforce by 18% in June 2022, which Armstrong cites as the beginning of an economic downturn.