Key Points:
Armstrong commented after assessing the company’s chances for 2023:
“As we examined our 2023 scenarios, it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario. While it is always painful to part ways with our fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount.”
According to its 8K filing, the exchange projects that the restructuring costs associated with these actions will amount to between $149 million and $163 million. Of this, monetary charges for employee severance and other termination payments will total between $58 and $68 million. The cost of stock-based compensation for the layoffs will range from $91 million to $95 million.
In the first quarter of this year, Coinbase expenditures anticipate recognizing these costs. Armstrong cautioned there is a possibility of more spread following the impact of dishonest actors in the cryptocurrency market.
As the U.S. Federal Reserve raised interest rates to 14-year highs to combat scorching inflation, Armstrong also noted that the value of cryptocurrencies trended lower throughout 2022.
In June 2022, Coinbase laid off 1,100 employees, or 18% of its workforce, and another 60 workers in November 2022.
Genesis Trading announced a new round of layoffs last week, cutting its staff by 30%.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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