Cryptocurrency exchange Coinbase Global Inc. said on Tuesday it will reduce its workforce by about 20 per cent, or 950 employees, which is the third round of major layoffs at the company in under a year.
The company said it expects to incur about $149 million US to $163 million US in restructuring expenses. Its shares fell three per cent in early trading on the stock market. Over the past year, the company’s shares have lost about 90 per cent of their value amid a broader cryptocurrency plunge.
“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,” said Owen Lau, analyst at Oppenheimer.
Last year, rising interest rates and worries of an economic downturn wiped out more than a trillion dollars from the crypto sector. The slump also forced key industry players such as Three Arrows Capital and Celsius Network to shut shop.
However, the bigger blow came after larger crypto exchange FTX filed for bankruptcy protection in November. Its swift fall has sparked tough regulatory scrutiny of how major exchanges hold user funds.
“We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion,” Coinbase CEO Brian Armstrong said in a blog post.
“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.
The crypto world’s woes have continued this year, marked by plunging deposits, layoffs and multiple legal hurdles.
Coinbase in November cut more than 60 jobs in its recruiting and institutional onboarding teams, after slashing 1,100 jobs, or 18 per cent of its workforce, in June.