In a move prompted by the crypto market’s downturn, Coinbase has announced a reduction of approximately 14% of its workforce as stated by CEO Brian Armstrong on Tuesday. This decision marks a significant shift towards an AI-centric business model.
“We’re not just cutting costs; we’re redefining our operations to focus on intelligence with human input serving supportive roles,” Armstrong explained in an internal email, which he later shared via Twitter.
In the company-wide message sent earlier that day, Armstrong addressed employees about the rationale behind the decision and its implications for those affected. “We are currently facing a down market, necessitating immediate adjustments to our cost structure,” he noted, also highlighting AI’s transformative impact on their workflows. Over recent months, he observed engineers leveraging AI to expedite tasks from weeks to days, automating numerous processes.
This layoff represents a strategic realignment for Coinbase, reflecting broader trends of AI-driven reductions in the tech and crypto sectors. Goldman Sachs economists previously estimated that AI is replacing about 25,000 US jobs per month while only adding back around 9,000 due to augmentation, resulting in a net loss of approximately 16,000 positions monthly.
Coinbase’s organizational structure will be streamlined to no more than five levels beneath the CEO and COO. The company plans to eliminate roles focused solely on management, ensuring all leaders are active contributors. Hiring efforts will concentrate around “AI-native pods,” integrating engineering, design, and product teams into single-person units. Leaders will manage up to 15 direct reports.
Coinbase recently tested AI agents modeled after co-founder Fred Ehrsam and former CTO Balaji Srinivasan to provide strategic feedback internally, with Armstrong suggesting that the company might soon have more AI agents than human employees.
Across the crypto industry, similar workforce reductions are underway as companies shift resources towards automation and leaner operations. For example, Meta laid off around 8,000 employees last month, or about 10% of its global staff, with a focus on AI infrastructure projected to cost $135 billion this year. Microsoft also offered buyouts to 7% of its workforce that week.
In the crypto space specifically, Bitcoin miner Marathon Digital reduced its staff by 15%, pivoting towards AI data centers. Algorand laid off 25% of its workforce in March, and Jack Dorsey’s Block cut more than 4,000 roles in February.
Coinbase employees affected by this decision will have their system access revoked immediately. U.S. staff will receive a severance package including at least 16 weeks’ base pay plus two additional weeks per year of service, the next equity vesting period, and six months of COBRA coverage. Visa holders will get extra transition support.
“The Coinbase that emerges from this restructuring will be more capable than ever in achieving our mission,” Armstrong concluded.