Coinbase Cuts Staff by Another 20% to Weather Crypto Downturn

Coinbase will reduce its workforce by 20% as it tries to weather the crypto market downturn.

CEO Brian Armstrong announced the cuts — which affect 950 of Coinbase’s 4,700 workers — in a company blog post on Tuesday (Jan. 10) morning. It marks the third time the cryptocurrency exchange has reduced its staffing levels since June of last year.

“As we examined our 2023 scenarios, it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario,” Armstrong wrote. “While it is always painful to part ways with our fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount.”

The layoffs follow the firm’s decision in June 2022 to reduce its staff levels by 18%, with Armstrong citing a possible recession and a need to manage the company’s burn rate as the reasons. He also said the company grew “too quickly” during a bull market.

In November, Coinbase cut another 60 jobs, this time in its recruiting and institutional onboarding teams.

Armstrong noted the past job cuts in his message Tuesday, saying that “in hindsight, we could have cut further at that time.”

Recent months and weeks have seen other crypto companies reduce their staffing, including Genesis, which reportedly laid off 30% of its workforce last week. Crypto exchange Kraken slashed 1,100 jobs in November.

The new layoffs come just days after Coinbase agreed to pay a $100 million settlement to the New York Department of Financial Services after an investigation found “significant failures” in the company’s compliance program.

“These failures made the Coinbase platform vulnerable to serious criminal conduct, including, among other things, examples of fraud, possible money laundering, suspected child sexual abuse material-related activity, and potential narcotics trafficking,” the department said.

Coinbase said the settlement was “a critical step in our commitment to continuous improvement, our engagement with key regulators, and our push for greater compliance in the crypto space — for ourselves and others.”

PYMNTS noted last week that the settlement highlighted a problem in the crypto industry, as well as the regulatory strength of the government.

“That an actor like Coinbase, which offers more transparency into its operations than the majority of its peers, and regularly works with Big Four auditor Deloitte’s Blockchain and Digital Assets team, can still come up short of regulatory requirements shows just how far the rest of the crypto industry has to go to prove it represents a legitimate marketplace for interested users to park their assets,” PYMNTS wrote.

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