Coinbase halved a key component of developer pay
Losses narrowed and revenues declined less than forecasted, but this is the fifth consecutive quarterly loss for the crypto giant. And it seems that Coinbase technology employees that survived their layoffs won't be nearly as happy as they were last year.
The Q1 acccounts reflect a huge reduction in its stock based compensation for technology staff. RSUs fell over 50% from their total in last year's first quarter, from $256.5m to $122.7m.
Excluding the RSUs, Coinbase's operating expenses went from $314m in Q1 2022 to $236m in Q1 2023. This drop also reflects Coinbase's restructuring efforts, as a result of which 950 employees were let go. However, it's reasonable to presume that cash-based compensation has also been squeezed.
Speaking during yesterday's earnings call, Coinbase CEO Brian Armstrong emphasized that cost reductions were driven by "rebuilding parts of [the] technology stack to do things like optimizing data storage and CPU utilization in the cloud."
Crypto's compensation problem has been mitigated a lot over the past year as unsustainable salaries have all but vanished from the job market. However, Coinbase's total unvested RSUs still total $814.4m. Stripe may have been able to organize a multibillion funding round to escape its staff stock problem... Coinbase wouldn't likely have the same success.
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