• Coinbase is letting go of approximately 1,000 employees as part of a critical strategy to weather down the crypto winter.
• This is the third round of layoffs the company has experienced in the past year as macroeconomic conditions and persistent downside pressure continue to affect the nascent sector.
• Coinbase CEO Brian Armstrong believes the restructuring strategy will benefit the company in the short and medium terms, but they are also worried that the collapse of the crypto exchange FTX may cause other companies and projects to experience negative impacts in the coming months.
Coinbase, one of the world’s leading cryptocurrency exchanges, has announced that it is laying off about 1,000 employees as part of an ongoing restructuring effort. The move comes as the nascent crypto sector continues to be impacted by the ongoing macroeconomic downturn, as well as persistent downside pressure.
The decision to cut down on staff was made after Coinbase CEO Brian Armstrong and the company’s leadership team planned for the next three years. The most significant factor behind this decision was the collapse of crypto exchange FTX, which filed for bankruptcy in late 2022, negatively impacting many projects.
Armstrong believes that the restructuring strategy will benefit the company in the short and medium terms, but they are also worried that the collapse of the crypto exchange FTX may cause other companies and projects to experience negative impacts in the coming months.
The recent layoffs represent a 25% reduction in the company’s operating expenses, and Armstrong said: “As part of a headcount reduction like this, we will be shutting down several projects where we have a lower probability of success. Affected teams will receive communication on this today. Our other projects will continue to be developed and launched.”
The move is a major step in the company’s strategy to weather down the crypto winter, as the sector is still in its infancy and the macroeconomic conditions have taken a toll on the industry.
Coinbase is not the only crypto exchange that has been affected by the ongoing downturn, as other exchanges such as Binance and Kraken have also been forced to implement layoffs and cost-cutting measures.
The layoffs come as the crypto industry is on the brink of a major breakthrough, with Ethereum and DeFi continuing to lead the way in terms of growth and adoption.
It remains to be seen how the restructuring efforts at Coinbase will impact the industry as a whole, but it is clear that the crypto winter is far from over and that the sector is still in its nascent stages.
