Brian Armstrong, co-founder and chief executive officer of Coinbase Inc.
David Paul Morris | Bloomberg | Getty Images
Coinbase is cutting about a fifth of its workforce as it looks to preserve cash during the crypto market downturn.
The exchange plans to cut 950jobs, according to a blog post published Tuesday morning. Coinbase, which had roughly 4,700 employees as of the end of September, already slashed 18% of its workforce in June citing a need to manage costs and growing “too quickly” during the bull market.
“With perfect hindsight, looking back, we should have done more,” CEO Brian Armstrong told CNBC in a phone interview. “The best you can do is react quickly once information becomes available, and that’s what we’re doing in this case.”
Coinbase said the move would result in new expenses of between $149 million and $163 million for the first quarter. The layoffs, along with other restructuring measures, will bring Coinbase’s operating expenses down by 25% for the quarter ending in March, according to a new regulatory filing. The crypto firm also said it expects adjusted EBITDA losses for the full year to be within a prior $500 million “guardrail” set last year.
After looking at various stress tests for Coinbase’s annual revenue, Armstrong said “it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario” and there was “no way” to do so without reducing headcount. The company will also be shutting down several projects with a “lower probability of success.”
Cryptocurrency markets have been rocked in recent months following the collapse of one of the industry’s biggest players, FTX. Armstrong pointed to that fallout, and increasing pressure on the sector thanks to “unscrupulous actors in the industry” referring to FTX and its founder Sam Bankman-Fried.
“The FTX collapse and the resulting contagion has created a black eye for the industry,” he said, adding that there’s likely more “shoes to drop.”
“We may not have seen the last of it — there will be increased scrutiny on various companies in the space to make sure that they’re following the rules,” Armstrong said. “Long term that’s a good thing. But short term, there’s still a lot of market fear.”
Cryptocurrencies have suffered alongside technology stocks as investors flee riskier assets amid a broader economic downturn. Bitcoin is down 58% in the past year, while Coinbase shares are off by more than 83%.
End of a growth era
Coinbase joins a chorus of other tech companies cutting jobs after going on a hiring binge during the pandemic. Last week, Amazon said it would cut 18,000 jobs, more than the online retailer initially estimated last year, while Salesforcereduced its headcount by more than 7,000, or 10%. Elon Musk slashed about half of Twitter’s workforce after taking the helm as CEO last year, and Meta cut more than 11,000 jobs, or 13%. Crypto companies Genesis, Gemini, and Kraken have also reduced their workforces.
“Every company in Silicon Valley felt like we were just focused on growth, growth, growth, and people were almost using their headcount number as a symbol of how much progress they were making,” Armstrong said. “The focus now is on operational efficiency — it’s a healthy thing for the ecosystem and the industry to focus more on those things.”
Early last year, Coinbase had said it planned to add 2,000 jobs across product, engineering and design. Armstrong said he’s now trying to shift the culture at Coinbase to “get back to its start-up roots” of smaller teams that can move quickly.
Coinbase went public in April 2021 and has seen its share price plummet since. The stock is trading below $40 after surging to $341 on its public debut. Coinbase debt that’s maturing in 2031 continues to trade at roughly 50 cents on the dollar. The company still had cash and equivalents of roughly $5 billion as of the end of September.
Coinbase said it would email affected employees on their personal accounts, and revoke access to company systems. Armstrong acknowledged the latter “feels sudden and harsh” but “it’s the only prudent choice given our responsibility to protect customer information.”
Despite the industry’s domino effect of bankruptcies and a marked drop in trading volume, Armstrong was steadfast in arguing that the industry isn’t going away. He said the demise of FTX would ultimately benefit Coinbase, as their largest competitor is now wiped out. Regulatory clarity may also emerge, and Armstrong said it “validates” the company’s decision of building and going public in the U.S. The CEO likened the current environment to the dot-com boom and bust.
“If you look at the internet era, the best companies got even stronger by having rigorous cost management,” he said. “That’s what’s going to happen here.”
Apple CEO Tim Cook, center, watches during the inauguration ceremonies for President Donald Trump, right, and Vice President JD Vance, left, in the rotunda of the U.S. Capitol in Washington, Jan. 20, 2025.
Wall Street and Apple investors cheered the pause on Chinese tariffs. Apple stock was up 6% in trading on Monday, versus 3% for the Nasdaq.
“I spoke to Tim Cook this morning, and he’s going to, I think, even up his numbers,” Trump said in the Oval Office. “$500 billion, he’s going to be building a lot of plants in the United States for Apple. And we look forward to that.”
Apple previously said in February it would spend $500 billion to expand many of its operations in the U.S., including assembling AI servers in Houston.
Any cooling of a U.S.-China trade war is expected to boost Apple, which does the majority of its device production in the country, and also counts the region as its third-largest by sales.
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Still, it’s not clear how much Monday’s announcement immediately helped Apple.
In April, most of Apple’s most important products, such as smartphones and computers, received exemptions on some of the highest 145% tariffs, but there are still 30% tariffs on Chinese imports even after Sunday’s deal. Apple still faces 10% tariffs in some of its secondary production locations, such as India and Vietnam.
The Trump administration wants Apple to bring device production, including iPhone manufacturing, to the United States, a move that many experts believe would be unlikely and expensive.
Earlier this month, Cook told investors about the company’s tariff strategy on an earnings call. He said that Apple is currently sourcing American-bound products from production locations in Vietnam and India, but didn’t want to speculate beyond June, calling the situation “difficult to predict.”
HANGZHOU, CHINA – JUNE 3, 2024 – The NVIDIA logo and the Apple logo are pictured in Hangzhou city, Zhejiang province, China, June 6, 2024. On June 5, Eastern time, Nvidia’s stock market value exceeded $3 trillion, officially surpassing Apple’s market value and becoming the world’s second largest technology giant by market value. It is worth noting that in just over 3 months, Nvidia’s market value soared from $2 trillion to $3 trillion. (Photo credit should read CFOTO/Future Publishing via Getty Images)
Cfoto | Future Publishing | Getty Images
Global technology and chip stocks rallied on Monday after the U.S. and China agreed to pause most tariffs on each other’s goods.
Technology stocks — such as semiconductor firms and smartphone makers — have been hit hard as trade tensions between the world’s two largest economies threatened to disrupt supply chains and hurt some of the biggest U.S. businesses.
But investors breathed a sigh of relief after talks between the U.S. and China over the weekend yielded a temporary pause in “reciprocal” tariffs.
In the U.S., Nvidia, which still faces a number of restrictions on the chips it is allowed to ship to China, was around 4% higher in premarket trade, while AMD was up 5%. Broadcom was also around 5% higher, along with Qualcomm.
Other companies in the semiconductor supply chain also jumped. Marvell, which last week postponed a previously scheduled investor day due to macroeconomic uncertainty, surged 7.5% in premarket trade.
Taiwan Semiconductor Manufacturing Co., the world’s largest chipmaker, saw its U.S.-listed shares jump around 4% in the premarket. TSMC’s Taiwan-listed stock closed before the tariff announcement.
In Europe, ASML, a supplier of critical machinery required to manufacture the most advanced chips, rallied 4.5% in early trade. Infineon was also sharply higher.
Semiconductors and some electronics received an exemption from President Donald Trump’s reciprocal tariffs last month, but the U.S. signaled the reprieve was temporary and that these products could still be in line for special duties.
Investors have been concerned about the impact on major tech stocks, especially those with exposure to China such as Apple and Amazon, whose shares have been under pressure this year.
Amazon was up more than 8% in premarket trade Monday. Many sellers on Amazon rely on Chinese products.
U.S.-listed Chinese tech stocks also surged. Chinese e-commerce giants Alibaba and JD.com were higher, alongside internet firm Baidu.
“With US/China clearly on an accelerated path for a broader deal we believe new highs for the market and tech stocks are now on the table in 2025 as investors will likely focus on the next steps in these trade discussions which will happen over the coming months,” Daniel Ives, global head of technology research at Wedbush Securities, said in a note on Monday.
“This morning is a huge win for the bulls and a best case scenario post this weekend in our view.”
Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.
The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.
Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.
“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.
“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.
“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”
Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.
Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.
“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.
“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”
