The latest victim of this challenging economic landscape is crypto exchange platform Coinbase, which just announced another round of layoffs. This time, the company said it is cutting around 950 employees. In his explanation of the layoff plan, co-founder and CEO Brian Armstrong tried to touch on some of the silver linings associated with the turbulence facing the crypto space and pointed out some of that turbulence might bring with it some much-needed regulatory clarity.
“Coinbase is well capitalized, and crypto isn’t going anywhere,” Armstrong said. “In fact, I believe recent events will ultimately end up benefiting Coinbase greatly (a large competitor failing, emerging regulatory clarity, etc.), and they validate our long term strategy.”
As a result of the announcement, U.S. employees will be given a severance of at least 14 weeks’ pay and health insurance. Individuals on a work visa will be given additional benefits and international employees will be provided support “in line with the employment laws of your country,” he said.
From Twitter
"Sad news, I was impacted by the layoffs at Coinbase. Although it’s not an ideal situation, I’m trying to look at the positive. I was fortunate to be apart an amazing team and work on some awesome initiatives. I’m going to miss everyone. Onwards and upwards."
In line with his hopeful tone, Armstrong also noted he believes sometimes economic downturns like the broader one facing the U.S. and other countries can sometimes help weed out companies that do not have what it takes to survive the rigors of economic uncertainty. As such, the companies that do survive will be in a strong position to “keep building great products and increasing economic freedom in the world.”
According to projections from J.P. Morgan Global Research, the world’s economy is expected to grow a meager 1.6% in 2023. While the entire globe is not at “imminent” recession risk, the U.S. is likely headed into one by the end of the year, notes the research report.
“Despite everything we’ve been through as a company and an industry, I’m still optimistic about our future and the future of crypto. 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,” Armstrong added. “But just like we saw with the internet, the most important companies not only survive but thrive during down markets by being rigorous with cost management, and continuing to build innovative products.”
From Twitter
The Kobeissi Letter @KobeissiLetter
Since October:
- Twitter laid off 75% of employees
- Apple instituted a hiring freeze
- Amazon laid off 17,000 employees
- Goldman Sachs laid off 8% of employees
- Meta laid off 13% of employees
- Coinbase laid off 20% of employees
- Intel laid off 20% of employees
The Coinbase note added some of the company’s projects will be shut down altogether, while other projects will continue as planned, just with fewer employees working on them. The ones shutting down entirely, said Armstrong, are the ones with a “lower probability of success.”
Investors with interests in Coinbase can look for a public 8-K filed at the time of the announcement and an earnings call taking place in February. “To those of you who will be leaving, please know that this is not a reflection of your work or contributions to Coinbase. I believe we have an incredible team, and all of you have been important members of that. Instead, it’s a reflection of the current economic climate and crypto market,” Armstrong added.
