The American-based cryptocurrency exchange known as Coinbase has announced via its website the reduction of its operating expenses by 25%, which includes letting go of 950 people from the company, which represents around 20% of its current workforce. Brian Armstrong, CEO and Co-Founder of Coinbase listed the crypto market trending downwards along with the broader macroeconomy as the main reasons for the layoffs.
The CEO continued reassuring the public by affirming that the crypto exchange was well-capitalized and that crypto was not going anywhere. However, the current downturn in the crypto market is proving to be a real struggle for the company. Armstrong explained how the company got to this point through the review of its annual planning for all potential scenarios, which included bull, base, and bear markets. Even though the exchange has already gone through multiple bear markets, the CEO explained that this was the first time a global economic downturn aligned with a bear market.
“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.”
For those affected by the decision, the announcement states that their access had already been restricted to guarantee the integrity and safety of Coinbase’s database. The CEO concludes the announcement with an optimistic approach toward the future of crypto, explaining how progress is not always seen as a straight line and comparing the crypto market to the creation of the internet and how companies not only survived that period but also thrived during down markets “by being rigorous with cost management, and continuing to build innovative products.”
Coinbase joins other tech companies that have also announced layoffs in 2023. Just last week, Salesforce announced its intention to reduce its workforce by 10%, laying around 8,000 people. Amazon also confirmed its second round of layoffs, cutting down around 18,000 people from its staff.