Coinbase will discontinue certain projects with a "lower probability of success" as part of a workforce reduction.
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Coinbase, a leading crypto exchange, is starting 2023 with more layoffs, cutting off another 20% of its employees in a second large wave of layoffs.
On January 10, Coinbase CEO Brian Armstrong made it official that the exchange would eliminate 950 employees as part of its efforts to slash operating costs by about 25% amid the ongoing crypto winter.
Armstrong stated that Coinbase is "well capitalized" and that crypto "isn't going anywhere," but that layoffs are necessary to maintain "appropriate operational efficiency." Coinbase will discontinue certain projects with a "lower probability of success" as part of a workforce reduction, the CEO said, without disclosing which projects will be done so.
"In fact, I believe recent events will ultimately end up benefiting Coinbase greatly," Armstrong said, pointing to the increased regulatory clarity and Coinbase's potential as a result of FTX's collapse. He added:
"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."
The United States Securities and Exchange Commission's 8-K form filing for Coinbase, which is included in the firm's blog announcement, states that the firm's audited financial statements for 2022 are not yet ready.
Coinbase intends to spend about $149 million to $163 million as part of its restructuring strategy to minimize operating costs, including $58 million to $68 million in cash charges associated with employee severance and other termination benefits. The filing states that the company anticipates the plan's execution to be nearly complete by the second quarter of 2023.
The most recent layoffs occurred after Coinbase initially decreased its workforce by 18% in June 2022, citing the start of an economic recession, as said by Armstrong.