Shulou(Shulou.com)11/24 Report--

On Tuesday, local time, Coinbase, the cryptocurrency exchange, said it would launch a second round of layoffs, with plans to cut 950 jobs, or about 20 per cent of the company's 4700 employees. Coinbase said the move was aimed at keeping more cash during a downturn in the cryptocurrency market.

Tuyuan Unsplash follows a layoff at Coinbase. Last June, Coinbase laid off 18 per cent of its staff in its first round of layoffs, citing the need to rein in costs and the need to slow down because it was growing too fast during the bull market.

"in hindsight, we should have done more," Brian Armstrong, chief executive of Coinbase, said in a telephone interview. "the best thing you can do is to react as soon as you get the information, and that's what we do in this situation."

Coinbase said the job cuts would result in new spending of between $149 million and $163 million in the first quarter of 2023. Layoffs and other restructuring measures will reduce Coinbase's operating expenses by 25 per cent in the first quarter, the company said in a regulatory filing. Coinbase also said it expected full-year adjusted EBITDA losses to be within the $500m guardrail set last year.

After studying various stress tests that could affect Coinbase's annual earnings, Mr Armstrong said: "it is clear that we need to cut spending to increase our chances of doing our best in a variety of situations, and we cannot achieve that without reducing the number of employees." The company will also close several "low probability of success" projects.

In recent months, the whole market has been shaken by the collapse of cryptocurrency trading giant FTX. Mr Armstrong referred to the impact of FTX's bankruptcy and noted that the industry was under increasing pressure because of "industry wrongdoers" such as FTX and its founder, Sam Bankman-Sam Bankman-Fried.

"the collapse of FTX and the chain reaction that followed have had a huge negative impact on the industry," Armstrong said. "We are likely to see tighter scrutiny of all types of companies in the sector to make sure they follow the rules. In the long run, this is a good thing. But in the short term, there is still a lot of concern in the market."

In early 2022, Coinbase said it planned to add 2000 jobs in the product, engineering and design fields. Armstrong claims that he is now trying to change the culture of Coinbase to "return to the state of a start-up", a small team model that can move quickly.

Coinbase is the latest technology company to announce massive layoffs. Last week, Amazon said it would cut 18000 jobs, more than its initial estimate for 2022. Salesforce said it would cut more than 7000 jobs, or 10 per cent of its workforce. Elon Musk (Elon Musk) laid off about half of its staff immediately after buying Twitter last October. Meta laid off more than 11000 people. Cryptocurrency companies Genesis, Gemini and Kraken have also reduced the number of employees.

Cryptocurrency prices are falling along with technology stocks as investors flee riskier assets in a broader economic downturn. Bitcoin prices have fallen 58 per cent over the past year, while Coinbase's shares have fallen more than 83 per cent.

Coinbase shares closed up more than 12 per cent on Tuesday after announcing a second round of layoffs. Earlier, JMP analysts said they believed Coinbase had long-term potential, prompting its share price to soar.

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