Coinbase, as part of a restructuring program, is set to reduce its headcount by around 950 employees by the end of Q2 2023. This means the crypto exchange will let go of 20% of its workforce. Currently, it has about 4,700 employees.
Coinbase, in its SEC filing, said this would be the platform’s response to the ongoing market conditions impacting the crypto economy. The restructuring process would cost the company $149 million – $163 million, including $58 million – $68 million in cash charges related to employee severance.
Coinbase tightened up on jobs in June 2022 when the crypto industry was hit by the bear market. Brian Armstrong, Coinbase CEO, said the crypto exchange had grown too quickly, scaling from 1,250 to over 5,000 employees at the start of 2021. The company cut 1,100 jobs, that is 18% of its workforce, and then let go of another 60 workers in November due to the ongoing crypto winter and the fall of FTX.
Armstrong said Coinbase reached this decision after looking at various stress tests for the company’s annual revenue. He explained that it became clear that Coinbase needs to reduce expenses to increase its chances of doing well in every scenario and there was no way to do so without reducing the headcount. Moreover, the crypto company will shut down several projects with a lower probability of success.