Coinbase lays off nearly 1,000 more employees, blaming FTX 'contagion' and economic downturn
The company plans to reduce operating expenses by 25 percent.
One of the biggest crypto exchange platforms in the world, Coinbase, is undergoing a massive round of layoffs. Coinbase co-founder and CEO Brian Armstrong said that the company will reduce its operating expense by 25% and let go of 950 employees.
In a company email-turned-blog post (spotted by the Verge), Armstrong said that the crypto market has "trended downwards along with the broader macroeconomy" and that "fallout from unscrupulous actors in the industry" contributed to Coinbase's decision to increase its present "operational efficiency" at the expense of jobs.
One of the "unscrupulous actors" Armstrong is talking about is the founder of the now-collapsed FTX, Sam Bankman-Fried, who has been charged with fraud. (Although 2022 saw many other crypto-related bad actors and NFT grifters, to be fair.)
"The FTX collapse and the resulting contagion has created a black eye for the industry," Armstrong told CNBC, saying that there will be "increased scrutiny on various companies in the space to make sure that they're following the rules."
The US employees affected by the layoffs will receive a minimum of 14 weeks severance and an additional two weeks for every year spent at the company. Armstrong also said Coinbase will ditch projects that have a "lower probability of success." More detailed specifics of the layoffs are listed in the company's 8-K filing with the SEC.
According to Armstrong, these "dark times will also weed out bad companies," and "better days" are ahead.
"Progress doesn't always happen in a straight line, and sometimes it can feel like we're taking two steps forward and one step back," he wrote.
The affected staff were all informed by email. In June, Coinbase laid off 1,100 members only four months after its infamous Super Bowl ad. At the time, Armstrong cited over-expansion and economic downturn as the causes.