Crypto exchange Coinbase is experiencing a second round of layoffs. This time, Coinbase intends to lay off 950 employees and shut down several projects.
Last June, Coinbase laid off 18% of jobs, or 1,000 employees, to “ensure we stay healthy during this economic downturn.” As it appears now, with another wave of cutting jobs at the exchange, these efforts were not enough.
Brian Armstrong, the CEO of Coinbase, writes in a blog post:
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 fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount.
In the latest report to the SEC, filed on January 10, Coinbase comments on the state of affairs and goes into further detail behind the job cuts:
In connection with these actions, the Company estimates that it will incur approximately $149 million to $163 million in total restructuring expenses, consisting of approximately $58 million to $68 million in cash charges related to employee severance and other termination benefits.
In the latest filing with the Securities and Exchange Commission, Coinbase has reported that it anticipates its adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBIDTA) losses for the financial year ending on December 31, 2022, to be within the negative $500 million loss threshold that the company established in the previous year.
Projects to be closed were not disclosed by Brian Armstrong. He only added that these projects have a “lower probability of success.”
Over the past ten years, we, along with most tech companies, became too focused on growing headcount as a metric for success. Especially in this economic environment, it’s important to shift our focus to operational efficiency.
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