Coinbase, a cryptocurrency corporation based in the United States, is preparing to let off a few more staff since the bear market remains unrecoverable. This is Coinbase’s third round of layoffs since the market crash.
In order to prevent the company from going under, the top cryptocurrency exchange plans to eliminate 950 jobs. All affected employees will be fully notified of this decision.
Due to the gloomy outlook of the market’s downward trend, numerous cryptocurrency startups and well-established institutions announced significant workforce reductions in the fourth quarter of 2022. Some of the cryptocurrency companies that were severely harmed by the market’s cold spell included FTX, Celsius, and Voyager.
Due to the severe market downturn, crypto enterprises have chosen to reduce their workforces in order to maintain operations. Coinbase fired 18% of its staff in June 2022 as a result of declining revenues. According to reports, at the time, letters of dismissal were offered to the 1,100 employees.
To meet the excesses of the current destabilizing situation of the cryptocurrency market, Coinbase has had to reduce its workforce three times in the previous six months.
Read also: COINBASE VENTURES AND FXT LEAD A $23M SEED ROUND FOR MARA TO DEVELOP AFRICA’S PORTAL TO THE CRYPTO ECONOMY
Information on Coinbase’s termination
Coinbase made huge earnings from 2020 to 2021 during the cryptocurrency market surge. During this time, Coinbase’s revenues grew, prompting it to expand its employment and cost base. Coinbase’s operational expenses were $4.8 million, and its net income was $3.6 billion.
Business costs quadrupled. Unexpectedly, the bearish pull spiraled. Coinbase’s problem is that many people believe they can make tasty gains trading those digital assets, despite the exorbitant fees it charges to exchange digital tokens with no real-world value.
Now, a lot fewer people retain that viewpoint. Falling cryptocurrency prices and scandals like the collapse of FTX have destroyed trust in the bitcoin industry. As its users have abruptly withdrawn money, Coinbase’s revenue has plummeted.
Sales dropped by 50% to $2.6 billion in the first nine months of 2022. Costs have skyrocketed. Operating expenses totaled $4.7 billion in those nine months, up 50% from the year before.
According to Coinbase CEO Brian Armstrong, the scam “created a black eye for the industry” and would likely lead to further fraud as industry scrutiny grew. To weather the storm, Coinbase is stopping low-probability projects and improving operations.
The layoffs will cost $149 million to $163 million in restructuring costs in the first quarter of 2023. In the first quarter of 2023, Coinbase expects a 25% drop in sales, marketing, technology, development, general, and administrative expenses. The drop will result from cost-cutting and layoffs.
A cost reduction of 25% is not enough. Operating expenses had to be cut by 50% for Coinbase to make a profit in the first nine months of 2022. Without a major bitcoin explosion, sales will likely remain constant in 2023. After two rounds of layoffs, Coinbase is anticipated to be acquired.
About coinbase
Coinbase was formed in 2012 to send and receive Bitcoin. The company now supports dozens of cryptocurrencies and has over 4,700 employees. No central office runs Coinbase. Coinbase has users in over 100 countries and trades $159 billion per quarter.
Coinbase’s bitcoin ecosystem supports 13,000 financial institutions.
Users can purchase, sell, and trade over 200 tradable cryptocurrencies like Bitcoin, Ethereum, and Dogecoin on Coinbase, a cryptocurrency trading and investing website. Coinbase is a major firm with over 98 million users and $256 billion in assets.
For simple buy and sell orders, beginners may choose Coinbase’s original platform. In November 2022, Coinbase began migrating advanced Coinbase Pro accounts to “Advanced Trade.”
Cryptocurrencies are dangerous and volatile, so they’re not for everyone. However, Coinbase is a great bitcoin platform for beginners and experts.