Coinbase Layoff: 14 Percent of Workforce Fired, CEO Cites Market Volatility and AI Adoption

Coinbase, the US-based cryptocurrency exchange, is laying off 14 percent of its global workforce, or roughly 700 employees. The company CEO, Brian Armstrong, announced the decision publicly on Tuesday, citing market volatility and artificial intelligence (AI) acceleration as the main reasons. This is the second layoff from the company, after it cut 18 percent of the jobs in 2022. Coinbase has promised transition support to the impacted employees and announced several organisational changes to streamline operations. Notably, this comes just three months after Jack Dorsey's Block announced a 40 percent layoff in February.

Coinbase to Fire 14 Percent of Employees

In a post on X (formerly known as Twitter), the Coinbase CEO shared the email that was sent to the employees informing them of the upcoming layoff. The impacted employees received an email an hour after the communication from Armstrong, along with an invitation to meet with HR. The same email took away the laid-off staff's system access “to protect customer information.”

“I know there are real people behind these decisions — talented colleagues who have poured themselves into this company and our mission. To those of you who will be leaving: thank you. You've helped build Coinbase into what it is today, and I am sincerely grateful for everything you've done,” Armstrong said.

To help with the exit, Coinbase announced that the affected employees in the US will receive a minimum of 16 weeks' base pay and an additional two weeks for each year worked at the crypto exchange. Alongside, they will also get the next equity vest and six months of healthcare. Those on a work visa will get extra transition support. Employees based outside of the US will also get similar support based on local factors and requirements, added the CEO.

As mentioned above, Armstrong said the reason behind the layoff is cost optimisation during a down market, and to capitalise on the AI automation. “AI is changing how we work. Over the past year, I've watched engineers use AI to ship in days what used to take a team weeks. Non-technical teams are now shipping production code and many of our workflows are being automated,” he said.

Apart from job cuts, Coinbase is also restructuring its organisation. The CEO said the hierarchy will be streamlined to ensure there are a maximum of five layers below the C-suite. The company is also shifting away from pure managers in favour of a leader-contributor hybrid role. Finally, the crypto exchange will also focus on AI-native talent who can manage “fleets of agents to drive outsized impact.” Armstrong said there will be experiments with one-person teams.