- Coinbase announced that it would cut off 25% of its operating expenses.
- Brian Armstrong alerted the public about the difficult decision of the crypto exchange as 950 workers were laid off.
- The crypto exchange mentions in its 8-K filing with the US SEC that its audited financial statement for 2022 was unavailable.
The bear market has seen many companies and firms change their policies drastically to fit the season and keep their heads above the drowning waters of the declining crypto market.
To continue its operation efficiently without attracting damages to the company, the CEO of Coinbase, Brian Armstrong, published a notice on the crypto exchange’s website, alerting the public about his difficult yet necessary decision to cut off 25% of his operating expenses.
Coinbase, one of the big-league crypto exchanges in the crypto industry, sent out emails to its “impacted team members” on January 10, informing them of the company’s decision to lay off 950 workers due to the unstable crypto market.
In the notice, Brian Armstrong, the CEO and Co-Founder of Coinbase mentioned that this was not the first time it would cut off its workforce as it tries to manage its affairs during the bear market. In June 2022, Coinbase had to lay off 18% of its workforce, around 1,100 employees.
Coinbase, an American publicly traded company founded in 2012, admitted that though it has witnessed numerous bear markets over the decade since it was founded, however, the current bear market, which began in 2022, is one of the worst in the crypto company’s history as the firm now has to say goodbye to more of its team members so the company can effectively function and not share the same fate as the other bankrupt crypto firms.
The CEO of Coinbase opined that although the bear market was dealing it a harsh card, crypto would not be going anywhere, and the recent events in the crypto industry could be advantageous for Coinbase.
“Coinbase is well capitalized, and crypto isn’t going anywhere. I believe recent events will ultimately benefit Coinbase greatly,” Armstrong said.
Brian Armstrong explained that every year, the company organizes its annual planning process where it creates multiple scenarios for revenue: “bull, base, and bear” in its 2023 scenario, it was clear that the crypto exchange would have to cut down on its expenses by offloading 25% of its operating costs.
According to Coinbase, reducing its headcount was one of many things on its itinerary. The crypto exchange also mentioned that it would shut down some projects with “a lower probability of success.”
Coinbase’s Message to Affected Members
The CEO and Co-Founder of the global crypto exchange announced that shortly after publishing the notice, the affected company members to be laid off would receive emails in their private accounts with an invitation to visit the HRBP and senior leader.
The affected members’ access to Coinbase’s system had been revoked. Though the procedure was quick and harsh, Brian believed it was necessary to do so as it was the only choice available given its duty to protect customer information.
However, the company stated that it would provide the workers with a “comprehensive package” to help them through the transition.
“To those of you who will be leaving, please know that this is not a reflection of your work or contributions to Coinbase, […] it’s a reflection of the current economic climate and crypto market,” Brian confirmed.
Coinbase’s 8-K Filing
In addition to the layoff message, Coinbase included its 8-K form filing with USA’s Securities and Exchange Commission (SEC), stating that the crypto firm’s audited financial statements for last year were unavailable.
The company announced its restructuring plan to manage its operating expenses in response to the ongoing bear market negatively impacting the crypto economy. The court filing stated that the company “expects execution of the plan to be substantially complete by the second quarter of 2023.”
Conclusion
Although it was a difficult and harsh decision to make, the CEO and Co-Founder of Coinbase, Brian Armstrong, weighed the options presented by the scenario for 2023 revenue and had no choice but to let go of 25% of its operating expenses due to the ongoing bear market in the crypto industry.
