Coinbase to cut 950 jobs and shut down several projects
Cryptocurrency exchange platform Coinbase is to cut around 950 jobs – 20% of staff – as it looks to shore up its operational efficiency amid a wider economic downturn.
Coinbase CEO and co-founder Brian Armstrong
Announcing the move, CEO and co-founder Brian Armstrong says that in 2022, “the crypto market trended downwards along with the broader macroeconomy”.
As a result, the firm is cutting its operational expense by around 25% quarter on quarter, Armstrong says, which includes letting go of around 950 people.
As part of the headcount reduction, Coinbase will also be shutting down several projects that “have a lower probability of success”.
Armstrong adds that over the past decade, tech firms have been “too focused on growing headcount as a metric for success” and that, going forward, the firm will shift its focus on to boosting operational efficiency.
Armstrong relates how, every year, the firm runs different revenue scenarios: bull, base and bear.
Running these scenarios, it became clear that Coinbase would need to reduce expenses to increase its chances of doing well in every scenario and that “there was no way to reduce our expenses significantly enough, without considering changes to headcount”.
“Over the last decade, Coinbase has made it through multiple bear markets using this process,” Armstrong says, but this is the first time a crypto cycle has coincided with a broader economic downturn.
Despite the bad news for those affected, Armstrong says he is “still optimistic about our future and the future of crypto”.
In June, the firm extended its hiring pause for the “foreseeable future” and was set to rescind a number of accepted job offers.
Coinbase joins a long list of fintech firms that have cut jobs in the past year due to wider market uncertainty and increasing costs.
