Coinbase, a cryptocurrency trading platform, is eliminating 950 employees, or nearly 20% of its workforce, in the second round of layoffs in less than a year.
The business highlighted unfavorable economic conditions and market disruptions for cryptocurrencies.
The price of bitcoin has dropped by about 60% over the previous year, and in late 2022, the collapse of the cryptocurrency exchange FTX, which had filed for bankruptcy protection in November after suffering the equivalent of a bank run, made an already turbulent year much more unstable.
Customers made billion-dollar withdrawal attempts after the exchange’s financial soundness was questioned.
Sam Bankman-Fried, the creator of FTX, pleaded not guilty last Thursday in Manhattan to charges of defrauding investors and stealing client money on his bitcoin trading platform last Thursday.
In a first round of layoffs, Coinbase stated in June that 1,100 positions, or around 18% of its global staff, would be lost.
Shares marginally declined by 3% before Tuesday’s opening bell.
In a regulatory filing, Coinbase Global Inc. stated that layoffs are a part of its reorganization plan, which it anticipates finishing by the second quarter.
The entire cost of restructuring is expected to be between $149 million and $163 million, of which between $58 million and $68 million would be spent on employee severance and other termination benefits.
It was incorporated in 2012 as a remote-first business with no central office, Coinbase.
It went public in April 2021 without using underwriters, just placing its stock on the stock exchange.