SAN FRANCISCO–A cryptocurrency trading platform and a brand-name investment bank have both announced layoffs.
Coinbase, the cryptocurrency trading platform, said it plans to lay off about 20% of its employees, its latest move to cut costs as crypto markets decline. In all, the company is laying off about 950 people, it said in a memo to staff, a move that comes after it cut around 1,100 employees in June, also about a fifth of its work force at the time, according to the New York Times.
“In hindsight, we could have cut further” in the layoffs announced last year, said CEO Brian Armstrong, who further implied that the collapse of FTX, which generated turmoil throughout the crypto industry, was having an impact on Coinbase, the Times reported.
‘Unscrupulous Actors’
“In 2022, the crypto market trended downwards along with the broader macroeconomy,” Armstrong said in the memo. “We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion.”
The downturn in crypto has put pressure on companies like Coinbase, which went public in 2021 and expanded rapidly during the pandemic, the Times noted. The price of Bitcoin has fallen more than 70% from its 2021 peak.
Coinbase said its latest cuts were part of a plan to reduce costs by 25 percent this quarter. The layoffs would cost between $149 million and $163 million, Coinbase said. The company is offering employees who were laid off at least 14 weeks of base pay, health insurance and assistance finding a next job.
Layoffs at Goldman Sachs
Separately, in New York Goldman Sachs has announced one of its largest rounds of layoffs since the financial crisis, with plans to shed up to 3,200 jobs, or roughly 6% of its work force, two people familiar with the changes told the Times.
“The layoffs across the bank underscore the economic challenges facing the Wall Street giant, which is also trying to regain its footing after a costly push into consumer banking,” the Times reported. “Goldman, like other major investment banks, had seen its fees soar during the pandemic, bolstered by a huge upswing in deal-making, trading and related activities. But it has struggled to keep up the momentum as deals have slowed and markets have fallen. Investors have also sharply questioned the growth prospects of the consumer-lending business that the bank rolled out in 2016.”
Goldman Sachs’ cutbacks come after Morgan Stanley earlier announced it was cutting approximately 1,600 jobs.