Technology

Coinbase to slash 20% of workforce in second major round of job cuts

Published

2 years ago

January 10, 2023

admin

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 950 jobs, 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 Salesforce reduced 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.”

Technology

Fintech stocks plummet as Wall Street worries about consumer spending, credit

Published

1 hour ago

March 10, 2025

admin

Fintech stocks plummet as Wall Street worries about consumer spending, credit

People wait in line for t-shirts at a pop-up kiosk for the online brokerage Robinhood along Wall Street after the company went public with an IPO earlier in the day on July 29, 2021 in New York City.

Spencer Platt | Getty Images

It was a bad day for tech stocks, and a brutal one for fintech.

As the Nasdaq suffered its steepest decline since 2022, some of the biggest losers were companies that sit at the intersection of Wall Street and Silicon Valley.

Stock trading app Robinhood tumbled 20%, bitcoin holder Strategy fell 17% and crypto exchange Coinbase lost 18%. Much of the slide in those three stocks was tied to the drop in bitcoin, which fell almost 5%, continuing its downward trajectory. The price of the leading cryptocurrency is now down 19% in the past month, falling after a big-post election pop in late 2024.

Beyond the crypto trade, online lenders and payments companies also fell more than the broader market. Affirm, which popularized buy now, pay later loans, dropped 11%, as did SoFi, which offers personal loans and mortgages. Shopify, which provides payment technology to online retailers, fell more than 7%.

JPMorgan Chase fintech analysts on Monday highlighted declining consumer confidence as a potential challenge for companies that rely on consumer spending for growth. In late February, the Conference Board’s Consumer Confidence Index slipped to 98.3 for the month, down nearly 7%, the largest monthly drop since August 2021. Walmart recently reported a shift away from discretionary purchases, underscoring the potential trouble.

“Our universe has modestly outperformed the S&P 500 since the election, but sentiment has soured of late on declining consumer confidence and signs of slowing discretionary spend,” the JPMorgan analysts wrote.

The fintech selloff follows a strong rally in the fourth quarter, driven by Fed rate cut expectations and hopes for a more favorable regulatory environment under the Trump administration.

WATCH: PayPal CEO Alex Chriss on opportunities for consumers and small businesses

PayPal CEO Alex Chriss: Huge opportunity to deliver to consumers and help small business

Technology

Oracle misses on earnings but touts data center growth from AI

Published

2 hours ago

March 10, 2025

admin

Oracle misses on earnings but touts data center growth from AI

Larry Ellison, chairman and co-founder of Oracle Corp., speaks during the Oracle OpenWorld 2017 conference in San Francisco on Oct. 1, 2017.

David Paul Morris | Bloomberg | Getty Images

Oracle issued quarterly results on Monday that trailed analysts’ estimates, but the company offered bullish comments on its cloud infrastructure segment.

Here is how Oracle did compared to LSEG consensus:

Earnings per share: $1.47 adjusted vs. $1.49 expected
Revenue: $14.13 billion vs. $14.39 billion expected

Revenue increased 6% from $13.3 billion in the same period last year. Net income rose 22% to $2.94 billion, or $1.02 a share, from $2.4 billion, or 85 cents a share, a year earlier. Revenue in Oracle’s cloud services business jumped 10% from a year earlier to $11.01 billion, accounting for 78% of total sales.

The company’s cloud infrastructure segment, which helps businesses move workloads out of their own data centers, has been booming due to demand for computing power that can support artificial intelligence projects. Oracle said revenue in its cloud infrastructure unit increased 49% from a year earlier to $2.7 billion.

“We are on schedule to double our data center capacity this calendar year,” Oracle Chair Larry Ellison said in a release. “Customer demand is at record levels.”

In January, President Donald Trump announced plans to invest billions of dollars in AI infrastructure in the U.S. in collaboration with Oracle, OpenAI and SoftBank. The first initiative of the joint venture, called Stargate, will be to construct data centers in Texas — an effort that is already underway, Ellison said during the announcement at the White House.

Oracle’s cloud and on-premises licenses business contributed $1.1 billion in revenue during the quarter, down 10% year over year.

Oracle also said it is increasing its quarterly dividend to 50 cents a share from 40 cents.

As of Monday’s close, the stock is down almost 11% year to date.

Oracle will hold its quarterly call with investors and will share its outlook at 5 p.m. ET.

Don’t miss these insights from CNBC PRO

Oracle misses on quarterly results, raises dividend by 25%

Technology

Asana CEO Dustin Moskovitz announces retirement, stock plummets 25%

Published

2 hours ago

March 10, 2025

admin

Asana CEO Dustin Moskovitz announces retirement, stock plummets 25%

Asana CEO and Facebook co-founder Dustin Moskovitz

PATRICIA DE MELO MOREIRA | AFP | Getty Images

Dustin Moskovitz, the CEO of Asana and one of the original founders of Facebook, is retiring from the software company he started in 2008.

Asana announced Moskovitz’s retirement on Monday as part of the company’s fiscal fourth-quarter earnings report, and its board has retained an executive search firm to help choose a new CEO. Moskovitz notified its board “of his intention to transition to the role of Chair when a new CEO begins,” the company said Monday.

“As I reflect on my journey since co-founding Asana nearly 17 years ago, I’m filled with immense gratitude,” Moskovitz said in a statement. “Creating and leading Asana has been more than just building a company — it’s been a profound privilege to work alongside some of the most talented minds in the industry.”

Asana said fourth-quarter sales rose 10% year-over-year to $188.3 million, which was in-line with analyst estimates.

The company said its fourth-quarter adjusted earnings per share was breakeven, ahead of analyst estimates of a loss of one cent per share.

Asana said it expects fiscal first-quarter revenue of $184.5 million to $186.5 million, trailing analyst expectations of $191 million.

Asana’s stock price was down more than 25% in after-hours trading Monday.

WATCH: The market declines look more like a reversion to the Fed.