Coinbase is cutting nearly 1,000 jobs, citing a difficult cryptocurrency climate

Cryptocurrency trading platform Coinbase is cutting roughly 20% of its workforce, or about 950 jobs, in its second round of layoffs in less than a year.

The company cited adverse economic conditions and disruptions in cryptocurrency markets.

Bitcoin has fallen nearly 60% in the past year, and a volatile year worsened in late 2022 with the collapse of cryptocurrency exchange FTX, which filed for bankruptcy in November after experiencing the equivalent of bankruptcy. Clients tried to withdraw billions of dollars from the stock exchange after its financial stability came into question.

Last week, FTX founder Sam Bankman-Fried pleaded not guilty in Manhattan federal court to charges of defrauding investors and stealing customer deposits on his cryptocurrency trading platform.

U statement posted on the company’s website, Coinbase co-founder and CEO Brian Armstrong hinted at the collapse of FTX, noting the risk of “further contagion” in the cryptocurrency sector. He also said Coinbase had grown “too focused on headcount as a measure of success.”

Coinbase has announced that eliminating 1,100 jobs in Juneor about 18% of the global workforce, in the first round of cuts.

The company’s shares fell a bit 3% before Tuesday’s open.

Coinbase Global said a regulatory filing said the layoffs are part of a restructuring plan it plans to complete by the second quarter.

“When we looked at our scenarios out to 2023, it became clear that we would need to cut costs to increase our chances of success in each scenario,” Armstrong said. “While it is always painful to part with our colleagues, there was no way to reduce our costs significantly enough without taking into account the changes in staff.”

The company expects between $149 million and $163 million of total restructuring costs, including between $58 million and $68 million of costs related to severance and other severance payments.

Coinbase is a remote company that was founded in 2012 and has no headquarters. It went public in April 2021, placing its shares directly and skipping the traditional process of recruiting underwriters.