Coinbase Continues To Do Layoffs Due To Bearish Crypto Market• January 10, 2023 10:21 am • Comments
It has been reported that major cryptocurrency exchange Coinbase will be doing a second round of layoffs in an effort to “weather the crypto winter”.
Approximately 950 employees will be let go from the company and this is a continuation of the first mass layoff that the firm did last year.
In the exchange’s announcement, it seems that they also hinted at the collapse of FTX as a possible reason for the company’s workforce reduction.
Investors and speculators of the industry have expected the exchange to be affected due to the market conditions, but many still believe that Coinbase is one of the major players that will still continue to exist once the bear market is over.
Overall, Coinbase has already cut around 18% of its total staff and likely has plans to continue to do so in order to reduces expenses as much as possible.
Cryptocurrency exchange Coinbase Global Inc. said on Tuesday it will reduce its workforce by about 20 per cent, or 950 employees, which is the third round of major layoffs at the company in under a year. https://t.co/yZzFun60UN
— Qudach Canada (@QudachCA) January 10, 2023
“The FTX collapse and the resulting contagion has created a black eye for the industry,” Armstrong told CNBC, and suggested that more pain may be yet to come.
“We may not have seen the last of it — there will be increased scrutiny on various companies in the space to make sure that they’re following the rules… Long term that’s a good thing. But short term, there’s still a lot of market fear.”
Coinbase’s layoffs come amidst a broader downturn in the crypto market. The value of Bitcoin has plummeted in recent months, and is down around 58 percent over the past year according to CNBC.
Coinbase’s shares have trended in a similar direction since going public in April 2021. Its stock is trading at under $40, down from a high of over $340 in 2021.
Of course, Coinbase is only one company out of a long line of crypto firms that have been affected by market conditions in the past year.
Many other crypto firms and blockchain projects have already shut down or reduced operations and it is expected that only those that provide real value or utility will survive.
In the long run, investors should see this as beneficial and it separates the winners from the losers and this is what will allow the crypto market cap to grow to new levels.
Also, once clear regulation is finally put in place and all the speculation is removed, this is what will entice major financial institutions to join the market which will send the value of crypto to new highs.
Coinbase CEO Brian Armstrong blames ‘unscrupulous actors’ for latest layoffs https://t.co/1P7q39Kqxr
— I NFT Daily (@inftdaily) January 10, 2023
Coinbase said it would email affected employees on their personal accounts, and revoke access to company systems. Armstrong acknowledged the latter “feels sudden and harsh” but “it’s the only prudent choice given our responsibility to protect customer information.”
Despite the industry’s domino effect of bankruptcies and a marked drop in trading volume, Armstrong was steadfast in arguing that the industry isn’t going away. He said the demise of FTX would ultimately benefit Coinbase, as its largest competitor is now wiped out.
Regulatory clarity may also emerge, and Armstrong said it “validates” the company’s decision of building and going public in the U.S. The CEO likened the current environment to the dot-com boom and bust.
“If you look at the internet era, the best companies got even stronger by having rigorous cost management,” he said. “That’s what’s going to happen here.”
#morningminute The hits keep on coming for the #CryptocurrencyMarket Once the hottest #alt #investment it has been plagued by volatility & scandal #FTX Now another #crypto juggernaut has entered the fray as @coinbase announces its 2nd round of layoffs 😢https://t.co/CAlR0g8DaY
— Supervest (@Supervest_) January 10, 2023
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