Coinbase CEO Brian Armstrong at Vanity Fair’s New Establishment Summit, October 2019.Vanity Fair
Popular cryptocurrency exchange Coinbase will be reducing its number of employees by 20% as part of a restructuring plan to lower the company’s operating costs, CEO Brian Armstrong said in a blog post on 10 January.
According to the announcement, the San Francisco-based exchange is planning to layoff 950 of its current employees — which number around 4,700 at present — in order to reduce its operating expenses by close to 25% by the end of Q2 2023. Armstrong noted that the decision was taken after an examination of the exchange’s prospects for 2023, which showed Coinbase would need to make major changes to its headcount. Armstrong wrote:
“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.”
The CEO also noted that as part of these layoffs, Coinbase was going to shut down several projects with a “lower probability of success”, though he avoided mentioning which projects exactly will be terminated. Armstrong also emphasized that the exchange was “well capitalized”, and that while recent events had negatively affected the crypto market in the short term, they would “ultimately end up benefiting Coinbase greatly”. The CEO was likely referring to the collapse of FTX, and the growing regulatory clarity for crypto.
The announcement was made the same day Coinbase filed its 8-K form with the U.S. Securities and Exchange Commission, which revealed the company was expecting to spend between $149 million and $169 million on the restructuring plan, including $58 million to $68 million in cash charges for employee severance.
This is not the first time Coinbase had reduced its headcount, with the exchange laying off around 1,100 of its employees — around 18% of staff at the time — back in June 2022. In November, when the failure of FTX triggered another collapse in the crypto market, the exchange reduced its headcount by another 60 employees.