Cost Cutting Measures
Coinbase CEO Brian Armstrong officially announced the layoffs on January 10th as part of measures to reduce the firm's operating costs by around 25%. Armstrong emphasized that while Coinbase is "well capitalized" and crypto "isn't going anywhere," the firm has to proceed with layoffs to maintain "appropriate operational efficiency."
As part of the headcount reduction, the firm will shut down several projects with a "lower probability of success" without specifying which projects will be terminated. Armstrong also noted that recent events would ultimately end up benefiting Coinbase greatly, referring to growing regulatory clarity and opportunities following the failure of FTX.
Filing with SEC
Coinbase's blog post announcing the layoffs was accompanied by a filing with the United States Securities and Exchange Commission, which stated that Coinbase's audited financial statements for 2022 are not yet available.
The restructuring plan is expected to cost Coinbase about $149 million to $163 million, including $58 million to $68 million in cash charges related to employee severance and other termination benefits. The company expects the plan to be substantially complete by the second quarter of 2023.
The latest layoffs come months after Coinbase initially reduced its headcount by 18% in June 2022, with Armstrong citing a starting economic recession as the reason for the initial layoffs.