Coinbase Global Inc said on Tuesday that it would reduce its workforce by about 20 percent, or 950 employees, as part of a restructuring plan in the third round of layoffs for the cryptocurrency exchange since last year.
The company said it expects to spend approximately $149 million to $163 million in restructuring expenses. Its shares fell 2.7 percent premarket after earlier rising more than five percent on the layoff announcement.
“With the entire industry going through a crisis of confidence and trading volumes remaining very weak, these job cuts are a reflection of the current challenging environment,” said Oppenheimer analyst Owen Lau.
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Last year, concerns of rising interest rates and an economic recession wiped out over a trillion dollars from the crypto sector. The recession forced major industry players such as Three Arrows Capital and Celsius Network to shut shop.
However, a major blow came in November after major crypto exchange FTX filed for bankruptcy protection. Its rapid decline has led to harsh regulatory scrutiny of how major exchanges hold user funds.
“We have also seen the decline of unscrupulous actors in the industry, and there may be further infections,” Coinbase CEO Brian Armstrong said in a blog post.
“We will turn down many projects in which we are less likely to be successful.”
Coinbase said it had no additional comment on the plan.
The crisis in the crypto world has continued this year due to falling deposits, layoffs and several legal hurdles.
Coinbase cut more than 60 jobs in its recruiting and institutional onboarding teams in November, after cutting 1,100 jobs.
or 18 percent of its workforce, in June.
The company’s shares lost about 86 percent of their value last year, in line with a decline in the sector’s fortunes.
(Reporting by Manya Saini in Bengaluru; Additional reporting by Niket Nishant; Editing by Soumyadev Chakraborty, Shaunak Dasgupta and Shinjini Ganguly)