Seven months after laying off 1,100 employees, Coinbase is now letting another 950 workers go due to the worsening downturn of the crypto market.
It announced on Tuesday that it would reduce its workforce by around 20% as part of a reorganization strategy in the exchange's third round of layoffs since last year.
Coinbase CEO Is Taking Accountability For The Layoffs
The company's CEO, Brian Armstrong, informed the workforce that he had decided to terminate the positions as a result of cutting operating expenses by 25% on a quarterly basis.
Coinbase is laying off around a fifth of its workforce, which is stated to be more than 4,700 on its website, according to Engadget.
Armstrong said he took full responsibility for the layoffs, even though he acknowledged that some of the contributing circumstances were beyond the company's control.
In retrospect, he continued, Coinbase should have permitted more individuals to return in June, and said that the FTX collapse and clearer rules could benefit the company in the future.
"We need to make sure we have the appropriate operational efficiency to weather downturns in the crypto market and capture opportunities that may emerge," Armstrong says.
The leadership at Coinbase determined that cutting costs will improve our chances of succeeding in every scenario when planning for 2023.
This is the first time, according to the CEO, that the cryptocurrency market and the larger economy have declined at the same time, Engadget reports.
Coinbase is dropping some projects that had a lower chance of success as a result of the layoffs, and other teams will need to adjust to having a smaller staff.
According to Armstrong, the employees who are being let go will be told today, and those affected US employees will get compensation.
The company also says that the employees who were let go will receive at least 14 weeks' base pay plus an additional two weeks for each year of service, health insurance, and other bonuses.
Additionally, those with work visas would receive "extra transition support," and Coinbase will provide comparable assistance to terminated employees abroad.
Read More: BTC.com Suffers Cyberattack, $3 Million Worth of Cryptocurrency Stolen
A Number Of Issues Have Been Affecting The Company Recently
The sharp decline in the price of bitcoin and other cryptocurrencies has severely hurt Coinbase, along with numerous other publicly traded and privately held cryptocurrency businesses.
According to CNN Business, after reaching a peak close to $65,000 in late 2021, the price of bitcoin is currently languishing around $17,000.
However, the strong start that bitcoin has had in 2023 has inspired some cryptocurrency enthusiasts with bitcoin up for more than 4% since the beginning of the year.
The hope is that the price of bitcoin and other cryptocurrencies may begin to settle, particularly if financial regulators begin to offer more direction and clarity regarding their position on cryptocurrencies.
Despite this, Coinbase shares, which went public in April 2021 and later that year reached an all-time high of over $370 per share, have since fallen to roughly $43 in a nearly 90% decline from its peak.
Additionally, the Securities and Exchange Commission was reportedly looking into whether or not the company sold unregistered securities in July.
Moreover, in response to accusations that it left the platform open to severe criminal activity, Coinbase settled with a New York financial regulator earlier this month for $100 million.
Related Article: Japan Will Lift Its Ban on Stablecoins in 2023
