Coinbase expects to incur about $149 million to $163 million in restructuring expenses.
Cryptocurrency exchange platform Coinbase announced on Tuesday that it will let go of 950 employees as a part of its restructuring plan. This is the third round of layoffs by Coinbase since last year.
“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,” said Brian Armstrong, chief executive officer and co-founder of Coinbase.
“As part of a headcount reduction like this, we will be shutting down several projects where we have a lower probability of success,” he said; adding that there could still be “further contagion” due to the fallout from unscrupulous actors in the crypto industry.
Coinbase will be providing a comprehensive package to support those affected by this transition. This includes a minimum of 14 weeks of base pay for those in the U.S., health insurance, and other benefits. The company will also provide extra transition support for impacted employees on a work visa and similar support to other employees from different countries.
A Reuters report suggests that Coinbase expects to incur about $149 million to $163 million in restructuring expenses. It is noteworthy that this is not the company’s first layoff. The crypto company has slashed more than 60 jobs in its recruiting and institutional onboarding teams in November last year. Before this Coinbase, which went public in 2021, laid off 18% of its workforce or 1,100 employees in June 2022.
The company’s move comes amid the continuous downfall of the crypto market in the last couple of years and also at a time when the global economy is headed towards an expected recession this year. A bigger blow to the crypto sector came after FTX filed for bankruptcy protection in November.
Sam Bankman-Fried, the founder of what was once a billion-dollar company FTX, was arrested last month on charges that he channeled FTX investors’ money to his own crypto hedge fund Alameda Research. He then made undisclosed venture investments along with luxury real estate purchases and political donations.