As part of a restructuring strategy, Coinbase Global Inc, announced on Tuesday that it will eliminate around 950 jobs, which is about 20% of its workforce. This will be the exchange’s third round of layoffs since last year.
The firm said it expects to spend between $149 million and $163 million on restructuring costs. Shares of the company were up 3.3% at $39.52.
Oppenheimer analyst Owen Lau said; “The entire industry is going through a crisis of confidence and trading volume remains very weak. This job cut is a reflection of the current challenging environment.”
More than a trillion dollars were lost from the cryptocurrency industry last year as a result of rising interest rates and concerns about an impending recession.
The biggest hit, though, was when the cryptocurrency exchange FTX sought bankruptcy protection in November.
The CEO of Coinbase, Brian Armstrong, stated in a blog post on Tuesday; “We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion.”
“We will be shutting down several projects where we have a lower probability of success.”
Coinbase said it had no additional comment on the plan.
“This (job cuts) is a move that can help with near-term operating leverage,” said Mizuho analyst Ryan Coyne, adding that it would not fix the underlying issue of rapidly deteriorating volumes.
“It is going to require much more significant cost cutting to accommodate the current volume run rate.”
This year has seen more problems for the cryptocurrency industry, including declining deposits, layoffs, and several legal obstacles.
The business, whose shares were up 3.3% to $39.52, stated that it anticipates spending between $149 million and $163 million on restructuring costs.fter slashing 1,100 jobs, or 18% of its workforce, in June.
The company’s shares lost about 86% of their value last year.
After laying off 1,100 employees, or 18% of its staff, in June, Coinbase reduced the size of its recruiting and institutional onboarding teams by more than 60 in November.
The value of the company’s shares decreased by nearly 86% last year.