It is about the cryptocurrency bear market in 2022 and the “rut of unscrupulous actors”, according to the platform’s boss.
Cryptocurrency exchange Coinbase announced Tuesday that it is laying off 950 employees, or just over 20% of its workforce, citing the decline in virtual currencies and the impact of the relocation of “unscrupulous actors“. The group, for its part, states that it has more than 4,700 employees worldwide. “In 2022, the cryptocurrency market has seen a downward trend, and so has the macro economy in generalCoinbase CEO Brian Armstrong said in a message to employees.
“We also have a bit of the fallout [des activités, nldr] by unscrupulous actors in the sector, and the contagion could continueAdded Brian Armstrong, referring to the dramatic bankruptcy of cryptocurrency exchange FTX, which filed for bankruptcy in November. Its co-founder and former boss, Sam Bankman-Fried, is being prosecuted by US law, particularly for fraud and criminal conspiracy.
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Coinbase had cut 18% of its workforce in June of last year, already suffering the tremors from the cryptocurrency market at the time. This new social plan, due to be completed in the second quarter, will cost the company between $149 million and $163 million, according to estimates given in a document sent to the US Securities and Exchange Commission, the SEC.
Coinbase expects an approximately 25% reduction in operating costs in the first quarter of 2023 compared to the previous quarter. Nasdaq-listed Coinbase shares fell 2.7% in electronic trading ahead of the Wall Street open. The dismissed employees receive financial compensation. The expatriates in the US will receive at least 14 weeks of their salary, health coverage and other salary benefits.
Other cryptocurrency exchanges, including Kraken and Gemini, have announced layoffs in recent weeks. More broadly, many US technology groups have recently announced staff reductions, including IT group Salesforce, Meta (Facebook, Instagram, WhatsApp), Amazon and Twitter.