- Coinbase reducing about 20% of its workforce
- COIN stock is trading down by over 81% YoY
Prominent crypto exchange Coinbase remained in the news again for the layoffs. The company reportedly announced plans to reduce its headcount and sack off about 950 employees. This accounts for about 20% of its total workforce. The reason behind the action is clearly the crypto market downturn and economy facing a struggling phase.
Co-founder and CEO of Coinbase, Brian Armstron said that the crypto exchange did the same in June last year when it reduced about 1,100 people from the company. The layoffs, however, were not sufficient to secure the company’s financial position within the crypto industry, especially given the ongoing struggling phase of the crypto winter.
The year 2022 had showcased the volatility of the crypto industry in a more practical manner. Not only the cryptocurrencies witnessed the decline, rather many prominent crypto companies also could not stand and filed for bankruptcies.
Global crypto market has lost more than 70 percent of its market capitalization from it’s all-time high in November 2021.
The various factors including Russia-Ukraine war, Federal Interest rate hike, Terra (LUNA) network collapse and several other instances resulting in crypto winter that went on to affect the entities within the space.
Crypto lending companies like BlockFi and Celsius have filed for bankruptcies while once a leading crypto exchange FTX also met the same fate in November last year.
Coinbase CEO explained that after looking over the scenarios for this year, the company found it necessary to minimize their expenses in order to boost their chances to perform well in ongoing conditions.
Citing the layoffs, Armstrong stated that it’s hurting when the fellow colleagues had to leave the company but there remains no other potential way that could help to decrease the operating expenses to the extent that layoff does.
Meanwhile Coinbase Global (NASDAQ: COIN) stock had witnessed an impressive growth within the last 24 hours. This is inferred as the direct impact of the layoff news.
Coinbase stock is trading at 43.23 USD after the surge of more than 12% in a day. The rally is considered the continuation of a price surge since Monday after several analysts showcased their belief within the company considering its long term thriving potential.
Source: https://www.thecoinrepublic.com/2023/01/11/coinbase-laying-off-950-employees-coin-stock-surging-over-12-in-a-day/