© Reuters. FILE PHOTO: A representation of cryptocurrency is seen in front of the Coinbase logo in this illustration taken March 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
By Manya Saini and Niket Nishant
(Reuters) – Coinbase Global Inc said on Tuesday it will cut about 950 jobs, or 20% of its workforce, as part of a restructuring plan that marks the third round of layoffs for the cryptocurrency exchange since the year. past.
The company, whose shares rose 3.3% to $39.52, said it expects to incur $149 million to $163 million in restructuring expenses.
“The entire industry is experiencing a crisis of confidence and trading volume remains very weak. These job cuts are a reflection of the current challenging environment,” Oppenheimer analyst Owen Lau said.
Last year, rising interest rates and concerns about an economic downturn wiped out over a trillion dollars from the cryptocurrency sector.
The biggest blow, however, came after cryptocurrency exchange FTX filed for bankruptcy in November.
“We also saw the consequences of unscrupulous players in the industry, and there could still be more contagions,” Coinbase (NASDAQ:) Chief Executive Officer Brian Armstrong said in a blog post on Tuesday.
“We will close several projects where we have a lower chance of success.”
Coinbase said it had no additional comment on the plan.
“This (job cut) is one measure that may help with operating leverage in the near term,” Mizuho analyst Ryan Coyne said, adding that it would not fix the underlying problem of rapidly deteriorating volumes.
“It’s going to require much more significant cost reduction to accommodate the current volume run rate.”
The cryptocurrency sector’s woes have continued this year, marked by falling deposits, layoffs and multiple legal hurdles.
In November, Coinbase cut more than 60 jobs on its institutional recruitment and onboarding teams, after cutting 1,100 jobs, or 18% of its workforce, in June.
The company’s shares lost about 86% of their value last year.
