Coinbase Lays Off 20% of Workforce Amid Heavy Losses
Cryptocurrency exchange Coinbase Global (NASDAQ: COIN) has a cost problem, and an initial round of layoffs in June wasn't nearly enough to solve it.
The company minted astounding profits during the cryptocurrency boom in 2021, which prompted a vast expansion of its workforce and its cost base. On $7.8 billion of revenue in that year, Coinbase booked operating expenses of $4.8 billion and a net income of $3.6 billion. All those numbers were up dramatically from 2020. Operating expenses rose more than fivefold.
The problem is that charging hefty fees to trade digital tokens that have no real-world uses or intrinsic value only works when enough people think they can make a profit trading those tokens. Far fewer people think that now. Cryptocurrency prices have crashed, and scandals like the collapse of FTX have destroyed confidence in the crypto economy.
Source Fool.com
