Coinbase Global (COIN) stated in a filing on Tuesday that it is letting off about 1,100 employees as part of a cost-cutting plan. Coinbase said in May that it would scale back its recruiting goals but then announced that it would cancel fresh employment offers.
- According to the new plan, the firm will decrease its employment by roughly 18 percent as of June 10 and will have around 5,000 total employees by the end of the current quarter, according to the company, which anticipates the plan to be implemented by the end of the second quarter. Coinbase predicted the total restructuring costs would be in the range of $40 million to $45 million.
- Coinbase CEO Brian Armstrong sent out an email to all of his staff on Tuesday morning.
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“After a ten-plus-year economic boom, we look to be approaching a recession,” Armstrong said, before hinting at the possibility of another crypto winter.
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The statement admits that the firm “expanded too swiftly” during the bitcoin bull market, growing from 1,250 people at the start of 2021 to 2,500 employees by the end of 2021.
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According to the message, outgoing Coinbase workers received the news through their personal email accounts after their access to Coinbase servers was revoked.
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Coinbase’s stock has dropped over 80% this year due to the dramatic drop in cryptocurrency values, which has harmed the exchange’s transaction volumes. After the layoff news was released on Tuesday morning, Coinbase’s stock jumped around 1% in pre-market trade. In regular trading, however, shares were down around 3% at $50.40.
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In response to the news, Mizuho cut its revenue forecasts for Coinbase for 2022 and slashed its price objective from $60 to $45. It expressed worry that laying off employees will stymie attempts to identify new revenue streams, perhaps leading to a price war with competitors as competition intensifies.
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Coinbase is the latest in a long line of cryptocurrency firms to announce layoffs. BlockFi, a financing platform, trimmed its workforce by 20% on Monday, and Crypto.com, a cryptocurrency exchange, announced 260 job cuts. Prior to that, the Winklevoss-led exchange and custodian Gemini reported a 10% employee reduction, while the Middle Eastern exchange Rain announced hundreds of job cuts.
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Bitcoin is priced at $22,150, down 68 percent from its all-time high of almost $69,000 in November.
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