Coinbase announced to lay off 13% of its workforce, approximately 950 employees due to the market downturn, and the need to lower costs.
Coinbase, one of the world’s largest cryptocurrency exchanges, announced that it will lay off approximately 950 employees, or nearly 13% of its workforce. The layoffs come as the value of Bitcoin and other cryptocurrencies continue to decline, leading to a widespread retrenchment in the crypto industry.
Coinbase “Lowering Costs and Adapting to Market Conditions”
In the company blog post, Coinbase CEO Brian Armstrong attributed the layoffs to the need to “lower our costs and adapt to the current market conditions.” Armstrong stated that Coinbase’s revenues have fallen by 30-40% due to the recent crypto market downturn. He also noted that the company needs to take drastic action to remain financially viable.
According to the CEO, the company will focus on its core products and services, and discontinue or scale back certain projects that are no longer strategic priorities.
“Increased Competition and Regulatory Scrutiny”
The layoffs at Coinbase indicate growing challenges facing the crypto industry. In addition to the ongoing bear market, the crypto industry is also facing increased competition and regulatory scrutiny.
Related; Coinbase on the Spotlight After Receiving Investigation Warrants from SEC
Last year, the U.S. SEC declared to consider many cryptocurrencies and initial coin offerings (ICOs) as securities, and subject to federal securities laws.
Such announcements from the SEC along with similar actions by other regulators around the world contribute to the increased uncertainty and legal costs for crypto companies.
The layoffs at Coinbase cause a significant blow to the cryptocurrency industry and highlight the ongoing challenges facing the sector.
[…] Related: Coinbase Lays off 950 Employees Amid Crypto Market Downturn […]