Amid the chaos that has engulfed the entire cryptocurrency industry, from which it has only recently started to recover, more trouble is ahead of the crypto trading platform Coinbase as its employees are preparing for yet another round of layoffs, which is set to reflect on the price of the company’s stock.
As it happens, Coinbase plans to cut 950 jobs in order to provide “the appropriate operational efficiency to weather downturns in the crypto market and capture opportunities that may emerge,” according to the announcement by the crypto exchange on January 10.
This is the second major round of layoffs for Coinbase, which previously let go of about 18% of its workforce, or 1,100 people, back in June 2022. CEO Brian Armstrong commented on the development for CNBC’s Squawk Box:
“With perfect hindsight, looking back, we should have done more. The best you can do is to react quickly once information becomes available, and that’s what we’re doing in this case.”
According to the announcement, the fired employees will receive a minimum of 14 weeks of basic salary compensation (plus two additional weeks per year worked), health insurance, extra support for work visa holders, and other benefits.
As part of the bid to cut operating expenses by 25% for the quarter ending in March 2023, Coinbase also plans to shut down several projects with a lower probability of success.
Reactions of COIN to major Coinbase news
At press time, the premarket price of Coinbase stock (NASDAQ: COIN) is slightly down, standing at $37.18 as it declined $0.37 or 0.99% from $37.55. On Monday, January 9, the price of Coinbase stock closed at $38.27 per share, recording an increase of 15.06% over the previous 24 hours, as well as being up 4.71% in the past five days, while still trying to recover from the 10.16% loss on its monthly chart.
It is also worth mentioning that a support zone ranging around $33.25 has formed through multiple trend lines coming together in multiple time frames. On the other hand, a resistance zone is currently located in the area at around $38.28.
Coinbase’s stock has been known to react before in connection with the developments surrounding the crypto exchange. For instance, it rallied 12% on January 4, 2023, after Coinbase agreed on a settlement worth $100 million with the New York Department of Financial Services in connection with compliance programs.
On the other hand, the Federal Financial Supervisory Authority of Germany (BaFin) order relating to Coinbase Germany GmbH for breaches of the German Banking Act’s “appropriate business organization,” brought the stock down by over 10% on November 8, 2022.
Earlier in September 2022, blockchain fintech software company Varitaseum Capital filed a $350 million-worth lawsuit against Coinbase regarding its payment and transfer technology patent, sinking COIN shares by more than 8%, as Finbold reported.