Coinbase lays off 950 employees to reduce operational expenses, shuts several projects

US-based Coinbase, a crypto exchange platform, announced on Tuesday that it is reducing its workforce by about 25 per cent, or 950 employees, to reduce operating expenses as the crypto market is trending downwards.

Last year, the company laid off 18 per cent of its workforce owing to economic conditions and rapid expansions. 

“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 is no way to reduce our expenses significantly, without considering changes to headcount,” says Brian Armstrong, CEO and co-founder.

Besides reducing the workforce, the crypto exchange will shut down several projects with a lower probability of success.

“We will share more detail publicly on our expense outlook in a public 8-K filing today and on our Q4 earnings call in February,” he adds.

Coinbase expects about $149M to $163M in total restructuring costs, including $58M to $68M in charges related to employee severance and other termination benefits, reports CNBC.

“We will be providing a comprehensive package to support you through this transition. For those of you in the US, this includes a minimum of 14 weeks base pay (2 additional weeks per year worked), health insurance, and other benefits. We are also providing extra transition support for impacted employees on a work visa. Those of you outside the US will receive similar support in line with the employment laws of your country,” adds Brian. 

Last year, Google partnered with Coinbase to accelerate web3 adoption and innovation. The partnership will involve Coinbase selecting Google Cloud as a strategic cloud provider to build advanced exchange and data services.

Coinbase also expanded its operation into several European markers, including the Netherlands. 

Coinbase: What you need to know

Founded in 2012 by Brian Armstrong and Fred Ehrsam, Coinbase allows users to create their wallets and start buying or selling bitcoins by connecting with their bank accounts. 

It also provides a series of merchant payment processing systems and tools that support many highly-traffic websites on the internet.

Approximately 98 million verified users, 13,000 institutions, and 230,000 ecosystem partners in over 100 countries use Coinbase to invest, spend, save, earn, and use crypto.