Shares of cryptocurrency exchange Coinbase (NASDAQ: COIN) gained after the company revealed it would cut 950 jobs, about 20% of its workforce, in its third round of layoffs in six months.
- Coinbase (NASDAQ: COIN) announced it would cut 950 jobs, about 20% of its workforce, to cut costs in the wake of current market conditions following the collapse of the FTX exchange.
- In the last six months, Coinbase has had three rounds of staff layoffs.
- CEO Brian Armstrong blames the FTX collapse, adding that there are likely more “shoes to drop.”
Coinbase Shares Are Up
In response to the cost-cutting decision, Coinbase shares went up 5% to $40.54 at 1:25 p.m. New York time. The stock gains come amid a recent rally in crypto stocks, which tend to follow gains in the crypto markets. Top cryptocurrency Bitcoin, which was down almost 60% in the past year, has recovered in the past week, sparking gains in some crypto stocks and a short squeeze for investors who had bet on their decline.
CEO Blames FTX Collapse
In an e-mail to employees posted on the company's blog, CEO Brian Armstrong blamed “the fallout from unscrupulous actors in the industry” for the turmoil in crypto markets, a reference to the collapse of multi-billion dollar collapse of crypto exchange FTX, whose former CEO Sam Bankman-Fried has been charged with money laundering and fraud.
The Bottom Line
There has been turmoil in the crypto industry since the fallout from FTX. A number of crypto firms have announced the termination of their employees, including Genesis, Silvergate, and Huobi, citing the negative environment that has developed since FTX collapsed.