Coinbase is letting another 950 employees go, seven months after it cut 1,100 jobs. In a note to staff, the company's CEO Brian Armstrong said that amid a downturn in the crypto market and the broader economy, he's made the call to reduce operating expenses by 25 percent quarter over quarter, resulting in the layoffs. Coinbase says on its website that it has more than 4,700 employees, so it's shedding around a fifth of its staff.
While acknowledging that some of the factors that resulted in the layoffs were outside of the company's control, Armstrong said he took accountability. He added that, in hindsight, Coinbase could have let more people go back in June.
Armstrong said the company is "well capitalized and crypto isn't going anywhere," and noted that recent events like FTX's collapse and clearer rules from regulators could benefit Coinbase in the long run. However, those changes won't happen overnight. "We need to make sure we have the appropriate operational efficiency to weather downturns in the crypto market and capture opportunities that may emerge," Armstrong wrote.
In planning for 2023, Coinbase's leadership determined it was necessary "to reduce expenses to increase our chances of doing well in every scenario." Armstrong notes that this is the first time that both the crypto market and the broader economy have simultaneously experienced a downturn, adding that planning has helped Coinbase to survive several bear markets over the last decade.
Due to the layoffs, Coinbase is canceling some projects that had a lower likelihood of success. Other teams will have to adjust for having a smaller headcount. Armstrong said the employees who are being let go will be informed today.
Impacted workers in the US will receive a compensation package of at least 14 weeks' base pay with an extra two weeks per year of service, health insurance and other benefits. The company says it will offer "extra transition support" to those on work visas. Coinbase will extend similar support to fired workers in other countries in line with local employment laws and it will help those being laid off to find their next job.
Coinbase has had to contend with other issues in recent times. In July, it was reported that the Securities and Exchange Commission was investigating the company over whether it sold unregistered securities. Earlier this month, Coinbase reached a $100 million settlement with a New York financial regulator over claims that it made the platform "vulnerable to serious criminal conduct," in part by neglecting to carry out sufficient background checks and having a large backlog of flagged transactions to review.