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Coinbase will lay off due to worse market situation

Coinbase, the largest US cryptocurrency exchange, will eliminate 1,100 jobs, equivalent to roughly 18% of the company's total workforce.

The exchange is trying to cut costs amid a downturn in financial markets, CEO Brian Armstrong announced on a company blog.

The cryptocurrency market is struggling with extreme volatility caused by economic and geopolitical uncertainties, including rising inflation and the effects of the war in Ukraine. The price of Bitcoin, which is the best-known and largest cryptocurrency by market capitalization, has been steadily declining as cryptocurrency lending firm Celsius Network has frozen withdrawals and transfers. Today, bitcoin is hovering around the $20,700 mark. Last November, it dipped to just under $69,000.

Coinbase plans to restructure

According to Coinbase, the total cost of the restructuring is expected to be between $40 million and $45 million and will largely be related to employee severance. The restructuring is expected to be largely completed in the second quarter and the company should have a total of about 5,000 employees at the end of June.

Last month, the company said its total revenue for the first three months of this year fell 35% to $1.17 billion. The number of active monthly users decreased by 19%, mainly due to the decline in the value of cryptocurrencies. Cryptocurrency exchanges raise money from fees for digital currency transactions, but the number of transactions has dropped significantly during the downturn.

Coinbase mobile app running at smartphone screen

Read also: Crypto outlook: Bitcoin, Ethereum and Solana

Coinbase, where employees work remotely, was founded in 2012 and has no headquarters. In April 2021, the company’s shares began trading on the exchange and closed the first trading day at $328. Today, they are trading at around $52, losing nearly 80% since the beginning of this year.

CEO Armstrong commented on the situation.

“We seem to be entering a recession after more than a decade of economic boom. The recession could cause another cryptocurrency winter and could last for a longer period.”

So we’ll see if his words are justified and indeed the current recession deepens. For now, we see a really bad scenario from industry data around the world.

Bruno is an Investment enthusiast with several years of experience in the industry. He enjoys following the latest news and technology trends...

Comments

  • Malek Sonia Nathalie June 20 2022 23:57

    Bonsoir à tous

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