A Coinbase sign appears on a monitor during the company’s initial public offering on the Nasdaq Market site on April 14, 2021 in New York City.
Robert Nickelsburg Getty Images News | Getty Images
coinbase CEO Brian Armstrong announced Tuesday that the company will cut about 14% of its workforce, citing market volatility and how AI is rapidly changing the way the company operates.
The move comes ahead of Coinbase’s first-quarter financial results, which the company is scheduled to release on Thursday. Shares rose nearly 4% in premarket trading.
In a memo to employees shared early Tuesday, Armstrong explained that the decision was necessary to position the company for its “next phase of growth” while weathering the current crypto market downturn. He cited two “forces coming together at the same time”: the current backlash in the cryptocurrency market and “AI changing the way we work.”
Although cryptocurrencies are “on the cusp of the next wave of adoption,” he said, “our business is still volatile from quarter to quarter…The market is currently in a downturn, and we need to adjust our cost structure now so that we can get through this period leaner, faster and more efficiently and grow into the next phase of growth.”
Furthermore, he said of AI, “The pace at which small, focused teams can achieve it has changed dramatically and is accelerating every day.” “We are making early and intentional adjustments to rebuild Coinbase to be lean, fast, and AI-native. We need to return to the speed and focus we had when we founded the startup with AI at its core.”
Coinbase’s move comes amid a wave of layoffs in the tech industry as AI investment increases. Earlier this year, Block announced that it would cut “nearly half” its workforce, citing “the opportunity to move faster with smaller, better-performing teams by leveraging AI to automate more work.”
Other companies, including Pinterest, CrowdStrike, and Chegg, have also recently announced layoffs, blaming AI-driven workforce restructuring.
However, Coinbase is not staying away from cryptocurrencies. Armstrong reaffirmed his bullish outlook on cryptocurrencies, pointing to stablecoins, tokenization, and prediction markets as drivers of the “next wave of adoption,” emphasizing the importance of real-world practicality and institutional adoption in their future.
Across the crypto industry, exchanges are moving away from the hype-driven, return-focused revenue streams that originally fueled their growth, and are instead entering a more disciplined phase centered around stable revenue, regulation, and compliance.
This is not the first time Coinbase has cut staff during a crypto recession, with the company making significant cuts during the market downturn in 2022.
