Coinbase Crypto Exchange to Cut Nearly 1,000 Jobs

The collapse of rival exchange FTX in November has kick-started a fresh round of layoffs across the industry. Crypto lender Genesis Global Trading Inc. eliminated about a third of its staff last week, and crypto exchange Huobi recently said it plans to lay off about a fifth of its staff.

Digital-asset companies, including Coinbase, also laid off employees last summer after the industry started to wobble.

Mr. Armstrong said that those affected by the layoffs would be informed Tuesday and that U.S. employees would receive a minimum of 14 weeks’ pay.

“Despite everything we’ve been through as a company and an industry, I’m still optimistic about our future and the future of crypto,” Mr. Armstrong said in the post. The layoffs are part of a restructuring plan, which Coinbase expects to be largely completed by the second quarter, according to a Securities and Exchange Commission filing. Coinbase estimated that it will have between $149 million and $163 million in total restructuring costs, with $58 million to $68 million in expenses related to employee severance benefits.

Coinbase shares rose 13% Tuesday. They plummeted more than 80% in 2022.

In 2021, crypto companies expanded their staffs as a run-up in individual trading and a sharp rise in cryptocurrency prices drove interest in the nascent sector. Coinbase’s staff increased to about 3,700 by the end of 2021 from only about 1,200 at the end of 2020, according to company statements.

Last year forced companies to re-evaluate that quick expansion. The collapse of a pair of sister cryptocurrencies last May knocked down the value of bitcoin and precipitated the fall of a crypto hedge fund and other crypto lenders. This sparked an initial wave of crypto company layoffs, including exchanges Blockchain.com, Crypto.com and Gemini.

The unexpected fall of FTX has compounded that. Its founder,

Sam Bankman-Fried,

stands accused of stealing billions of dollars of customer funds from his crypto exchange and of defrauding investors and lenders to his trading firm, Alameda Research. He has pleaded not guilty.

Crypto investors are bracing for other companies to downsize or declare bankruptcy. They are closely watching fund outflows from exchanges and the financial health of crypto lender Genesis, one of the largest in the space.

Write to Caitlin Ostroff at [email protected]

The collapse of rival exchange FTX in November has kick-started a fresh round of layoffs across the industry. Crypto lender Genesis Global Trading Inc. eliminated about a third of its staff last week, and crypto exchange Huobi recently said it plans to lay off about a fifth of its staff.

Digital-asset companies, including Coinbase, also laid off employees last summer after the industry started to wobble.

Mr. Armstrong said that those affected by the layoffs would be informed Tuesday and that U.S. employees would receive a minimum of 14 weeks’ pay.

“Despite everything we’ve been through as a company and an industry, I’m still optimistic about our future and the future of crypto,” Mr. Armstrong said in the post. The layoffs are part of a restructuring plan, which Coinbase expects to be largely completed by the second quarter, according to a Securities and Exchange Commission filing. Coinbase estimated that it will have between $149 million and $163 million in total restructuring costs, with $58 million to $68 million in expenses related to employee severance benefits.

Coinbase shares rose 13% Tuesday. They plummeted more than 80% in 2022.

In 2021, crypto companies expanded their staffs as a run-up in individual trading and a sharp rise in cryptocurrency prices drove interest in the nascent sector. Coinbase’s staff increased to about 3,700 by the end of 2021 from only about 1,200 at the end of 2020, according to company statements.

Last year forced companies to re-evaluate that quick expansion. The collapse of a pair of sister cryptocurrencies last May knocked down the value of bitcoin and precipitated the fall of a crypto hedge fund and other crypto lenders. This sparked an initial wave of crypto company layoffs, including exchanges Blockchain.com, Crypto.com and Gemini.

The unexpected fall of FTX has compounded that. Its founder,

Sam Bankman-Fried,

stands accused of stealing billions of dollars of customer funds from his crypto exchange and of defrauding investors and lenders to his trading firm, Alameda Research. He has pleaded not guilty.

Crypto investors are bracing for other companies to downsize or declare bankruptcy. They are closely watching fund outflows from exchanges and the financial health of crypto lender Genesis, one of the largest in the space.

Write to Caitlin Ostroff at [email protected]