'FTX Aftershock' Coinbase Lays Off Another 950 Employees... Stock Rises Over 8%

[Asia Economy New York=Special Correspondent Joselgina] Coinbase, the largest cryptocurrency exchange in the United States, has decided to lay off an additional 950 employees, accounting for about 20% of its total workforce. This comes as a large-scale wave of layoffs continues across the industry following the bankruptcy filing of its competitor FTX due to liquidity issues.

[Image source=Reuters Yonhap News]

According to The Wall Street Journal (WSJ), on the 10th (local time), Brian Armstrong, CEO of Coinbase, announced plans to reduce operating expenses by 25% compared to the previous quarter through additional layoffs and restructuring. The scale of this layoff is 950 employees, which corresponds to about 20% of the total 4,700 employees as of the end of September last year. Previously, Coinbase had announced a reduction of 18% of its workforce in June last year.

This restructuring is expected to be completed within the second quarter. Coinbase estimates the total restructuring costs to be between $149 million and $163 million, with employee severance costs ranging from $58 million to $68 million.

Coinbase's additional layoffs were announced amid a wave of restructuring across the cryptocurrency industry following the recent FTX incident. Earlier, Genesis, a major cryptocurrency lending company, announced plans to lay off about one-third of its workforce. The exchange Huobi also revealed plans to reduce its staff by one-fifth. WSJ reported, "The cryptocurrency industry, including Coinbase, had already laid off employees following the collapse of Korean-origin Terra and Luna last summer," adding, "The collapse of FTX has brought a new wave of layoffs across the industry."

However, CEO Armstrong stated, "Despite everything we have experienced as a company and across the industry, I remain optimistic about the future of cryptocurrency and our company."

Meanwhile, on the New York Stock Exchange shortly before the market close that day, Coinbase's stock was trading up 8.88% compared to the previous session following the news of the additional layoffs.