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Coinbase is laying off 950 employees (roughly one-fifth of its workforce) as the crypto industry struggles to maintain its footing.
Coinbase CEO Brian Armstrong told employees on Tuesday that the company was affected by the fall in cryptocurrency values and the collapse of FTX, the cryptocurrency trading platform that backed a number of cryptocurrency companies. said he was in pain.
“As we considered the 2023 scenarios, it became clear that we needed to cut costs to increase our chances of success in all scenarios,” Armstrong wrote in a message to employees. increase. “It’s always hard to say goodbye to a colleague, but there was no way we could cut costs significantly without considering a change in personnel.”
Armstrong said Coinbase is closing “several projects that are unlikely to succeed” as part of efforts to streamline operations. The company expects the layoffs to cut costs by 25% in the next quarter.
It’s the second wave of Coinbase layoffs that cut 18% of its staff in June after the cryptocurrency’s value plummeted.
“We cut headcount last year as the market started to adjust,” Armstrong said. “In hindsight, we could have cut more back then.”
Late last year, investors steadily withdrew from cryptocurrencies, pulling away from risky bets as interest rates rose. Cryptocurrency market capitalization has fallen from its November 2021 peak of around $3 trillion to $848 billion.
The collapse of FTX and the subsequent indictment of CEO Sam Bankman-Fried has eroded confidence in the crypto industry and caused several crypto companies to go bankrupt.
Experts predict that more companies will go bankrupt this year. In the memo, Armstrong said it could be “further contagious” from decisions by “unscrupulous industry actors.”
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