Since this year started, a number of companies around the world have either slashed their workforce or announced plans to do so. Cryptocurrency exchange Coinbase has announced plans to slash 20 percent of its workforce as part of its strategy for dealing with the current macroeconomic realities and preserving cash in the face of a crypto market downturn.
According to a blog post shared on Tuesday, the cut will affect about 950 employees. The latest cut follows last year’s which affected 18 percent of Coinbase’s workforce. This cut saw the layoff of 1,100 workers out of a total workforce of about 5,000 employees. As of the end of September, Coinbase had roughly about 4,700 employees.
Speaking on the situation, Coinbase’s CEO said that “With perfect hindsight, looking back, we should have done more. The best you can do is react quickly once information becomes available, and that’s what we’re doing in this case.”
Coinbase noted that the decision will bring in new expenses of between $148 million and $163 million in the first quarter. The company also noted in a new regulatory filing that the layoffs plus the restructuring measures it plans to put in place will reduce its operating expenses by 25 percent for the quarter ending in March.
Coinbase said it expects adjusted EBITDA losses for the full year to be within a previous $500 million forecast it set last year.
Talking about the need to reduce the company’s expenses, Coinbase’s CEO explained that “it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario” and there was ‘no way’ to do so without reducing headcount. The company will also be shutting down several projects with a “lower probability of success.”
Apart from the macroeconomic realities plaguing businesses, the cryptocurrency industry took a hit from the collapse of FTX, one of the biggest cryptocurrency exchanges in the world. Between last year and now, a handful of crypto businesses have folded up, while others continue to embark on strategies such as slashing their workforce to remain afloat.