Digital currency markets are still facing the difficulties of the crypto winter. Coinbase announced on Tuesday that the exchange plans to lay off 950 employees. The new layoffs follow budget cuts in June that reduced Coinbase’s workforce by 1,100.
The New York Times reports:
Coinbase CEO Brian Armstrong said in [a] memo that “in hindsight, we could have cut further” in the layoffs announced last year. That’s what he suggested the collapse of FTXwhich caused turmoil in the crypto industry impacted Coinbase.
Armstrong wrote that the “crypto market was on a downtrend along with the broader macroeconomics” in 2022, saying then: “We also saw the fallout from unscrupulous actors in the industry, and there may still be further contagion.”
The Time notes that tech giants Amazon, Meta and Salesforce have also been forced to shrink their ranks. Many say they were too aggressive with hiring at the height of the coronavirus pandemic.
Coindesk reports that analysts think the layoffs could have a positive side:
Coinbase shares rose nearly 9% to $41.62 following news of job cuts as multiple Wall Street banks reiterated their positive long-term outlook for the company.
Investment giant Oppenheimer stuck to its outperform rating, writing in a report Monday that Coinbase has the potential to be “one of the few long-term survivors” in the crypto space, citing “many positives” yet to come. must be priced into the stock including diversification, market share gains and a strong balance sheet as well as short-squeeze potential.