Layoffs in tech continue after Coinbase announced they would fire about 950 employees. The US-based cryptocurrency exchange Coinbase will reduce its workforce by around 25 percent, citing the current market turmoil as part of its reasons for the decision.
Brian Armstrong – CEO of Coinbase – said they had taken the “difficult decision” concerning the current crypto winter that is being witnessed in the market. Those affected by this harsh decision will be compensated with about 14 weeks of base pay together with health insurance.
In an official blog post, Coinbase’s CEO introduced the layoffs and specified why he had to write the letter.
“In 2022, the crypto market trended downwards along with the broader macroeconomy. We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion.
Coinbase is well-capitalized, and crypto isn’t going anywhere. In fact, I believe recent events will ultimately end up benefiting Coinbase greatly (a large competitor failing, emerging regulatory clarity, etc.), and they validate our long term strategy. But it will take time for these changes to come to fruition and we need to make sure we have the appropriate operational efficiency to weather downturns in the crypto market, and capture opportunities that may emerge.”
Brian Armstrong – CEO of Coinbase – also mentioned the number of employees affected and the reason for doing so.
” Therefore, I’ve made the difficult decision to reduce our operating expense(1) by about 25% Q/Q, which includes letting go of about 950 people(2). All impacted team members will be informed by today,” Brian Armstrong said.
Reason Why Coinbase is Laying off Workers
The CEO of Coinbase, in the official press release, highlighted the reason his company had to reduce the number of employees and the factors which contributed to the decision.
The CEO made a long explanation where he explained that the company could no longer handle the economic downturn witnessed all over the world. While mentioning that Coinbase has survived many bear markets and economic instability, the one happening within the last few years has been difficult for both the company and Coinbase stocks.
“As we examined our 2023 scenarios, it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario. While it is always painful to part ways with our colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount,”
Talking about how the departments of the affected employees will fare, the CEO of Coinbase said that they would be shutting down projects with a lower chance of success. In other words, the company will only be continuing with the core projects of the company instead of its planned schedule.
How Affected Employees will be Compensated
Brian Armstrong also stated that the company would compensate workers affected very well. After highlighting the effects on Coinbase stocks, workers affected by the layoffs will receive a private email informing them about the decision.
“We will be providing a comprehensive package to support you through this transition. For those of you in the US, this includes a minimum of 14 weeks base pay (2 additional weeks per year worked), health insurance, and other benefits. We are also providing extra transition support for impacted employees on a work visa. Those of you outside the US will receive similar support in line with the employment laws of your country,” Brian Armstrong said.
Coinbase joins the long list of crypto-based companies retrenching workers. Huobi is one of the exchanges rumored to have plans to fire many employees as internal strife continues.