Popular cryptocurrency exchange Coinbase has announced further measures to mitigate the impact of the bear market by terminating the contracts of 950 employees by the end of Q2.
The layoff equates to approximately 25% of their workforce, and succeeds a prior 18% reduction implemented in June last year.
Based upon statistics on Coinbase’s website, the team will be reduced to circa 3,760 employees going into Q3.
In a filing submitted to the US SEC on Tuesday, Coinbase stated:
“On January 10, 2023, the Company announced a further restructuring plan to manage its operating expenses in response to the ongoing market conditions impacting the cryptoeconomy, as well as ongoing business prioritization efforts.”Coinbase
The exchange also revealed that the “Plan”, as it is referred to, will amass between “$149-$163 million in “total restructuring expenses”, with somewhere between $58-68 million being distributed towards employee severance packages and other termination benefits.
Additionally, it was revealed that “approximately $91 million to $95 million will be in stock-based compensation expenditures relating to the acceleration of the vesting of outstanding equity awards in accordance with the terms of such awards.”
Coinbase’s stock COIN went public on the Nasdaq stock exchange in April 2021, launching their IPO at a price of $381 with a whopping $86 billion valuation. The market reacted moderately, soon pushing the share to a $100 million market cap.
However, the stock experience a gradual, but chronic demise, and is down to $40 – a seismic 95% capitulation from its initial price.
On January 6th, Coinbase were ordered by the New York State Dept of Financial Services to pay a US$100 million fine after it emerged that the exchange had failed to implement know-your-customer (KYC) procedures. As a result, new users were able to open account with little to no background checks.
In a settlement provision, the exchange were able to pay a monetary penalty of US$50 million within 10 days of the enforcement pursuant to sections 39 and 44 of the Banking Law and section 408 of the Financial Services Law.