Coinbase Stock Climbs 6% on Layoffs Plan
January 10 2023 - 02:01PM
Dow Jones News
By Sabela Ojea
Shares of Coinbase Global Inc. on Tuesday climbed 6.2% to $40.63
after the cryptocurrency company unveiled a plan to cut about 20%
of its workforce.
The effort to reduce costs boosted shares as high as $42.40, a
level last seen Dec. 13. The stock is down about 79% since the end
of March, when the Securities and Exchange Commission told publicly
traded cryptocurrency exchanges like Coinbase to report their
customers' digital tokens as liabilities on their balance
sheets.
Coinbase said it aims to reduce operating costs by 25% in the
first quarter of the year from the prior quarter by cutting about
950 jobs. At the end of September, the company had about 4,700
employees.
Additionally, the company said it expects to incur into total
restructuring expenses of between $149 million and $163
million.
Costs linked to contract terminations are set to be in the range
of $58 million to $68 million, the company said.
The restructuring plan comes as a response to the "ongoing
market conditions impacting the cryptoeconomy, as well as ongoing
business prioritization efforts," Coinbase said.
These charges are anticipated to be recognized in the first
quarter of 2023, the company said. The restructuring plan, on the
other hand, is expected to complete in the second quarter, Coinbase
said.
Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix
(END) Dow Jones Newswires
January 10, 2023 13:46 ET (18:46 GMT)
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