Coinbase cuts staff by a further 20%
Coinbase is a weird company, because it's got such an obvious comparable: CME Group. CME Group has about 3500 employees, did 1.2bn in revenue last quarter with 680m net income. Then you have coinbase now trimmming to about the same number 3500, 590m revenue and a net income loss of 550m. That's right, as far as I can see, Coinbase loses $1 for every $1 of revenue.Firstly, I don't see how Coinbase needs as many people as CME. They're meant to be a disruptive start up they should be lean. Secondly, how the hell do they get those unit economics to work? It should be a trivial job, right. People pay you to trade, so how are they losing so much money!? Well, I guess hiring 4,500 people... I think the idea at this point that Coinbase can get their cost structure down to reasonable numbers making them profitable at lower revenue levels is challenging. It's very hard to put that genie back in the bottle.