Affected by the Economic Crisis, Coinbase Was Forced to Cut 20 Percent of Its Workforce

Coinbase again lay off large-core employees. (photo: cdoinbase.com)

JAKARTA - Coinbase Global Inc announced on Tuesday January 10 that it will cut around 950 jobs, or 20% of its workforce, as part of a restructuring plan that marks the third round of layoffs for the cryptocurrency exchange since last year.

The company, whose shares rose 3.3% to USD 39.52 per share, said it would incur restructuring costs of around US$149 million to USD 163 million (IDR 2.3 – 2.5 trillion).

"The entire industry is experiencing a crisis of confidence and trading volumes are still very weak. The layoffs are a reflection of the current challenging environment," said Oppenheimer analyst Owen Lau.

Last year, rising interest rates and fears of an economic downturn wiped out more than a trillion dollars from the crypto sector.

However, an even bigger hit came after crypto exchange FTX filed for bankruptcy protection in November 2022.

“We are also seeing the impact of unscrupulous actors on this industry, and there is still the possibility of further transmission,” Coinbase Chief Executive Brian Armstrong said in a blog post on Tuesday.

"We will close some projects where we have a lower probability of success," Armstrong said. Coinbase also said it would have no additional comment on the plans.

"This (layoff) is a move that can help leverage short-term operations," said Mizuho analyst Ryan Coyne. He also added that the policy would not fix the underlying problem of rapidly deteriorating volumes.

"This will require much more significant cost-cutting to accommodate the current pace of running volumes," Coyne said.

The crypto sector's woes have continued this year, marked by plummeting deposits, layoffs, and various legal hurdles.

Coinbase last November slashed more than 60 jobs in its recruitment and institutional onboarding team, after slashing 1.100 jobs, or 18% of its workforce, in June. The company's shares lost about 86% of their value last year.