Coinbase cuts 14% of staff: Is AI the real reason behind the layoffs?

Brian Armstrong said Coinbase is cutting 14% of its workforce due to ongoing crypto market volatility and the rapid integration of artificial intelligence into everyday workflows.

In an internal email to employees, Armstrong said Coinbase remains financially strong but continues to face business fluctuations, prompting the need to reduce costs and operate more efficiently.

“Coinbase is well-capitalised, has diversified revenue streams, and is well-positioned to weather any storm. However, our business is still volatile from quarter to quarter,” he wrote on X.



The CEO also underscored how AI is reshaping operations across the company. Engineers, he said, can now complete tasks in days that previously took weeks, while non-technical teams are increasingly capable of producing production-level code.

“The pace of what’s possible with a small, focused team has changed dramatically,” Armstrong wrote, adding that failing to act now would pose a greater risk.

Restructuring efforts

As part of the overhaul, Coinbase plans to flatten its organisational structure, limiting hierarchy to five layers below the CEO and COO, and eliminating roles focused solely on management.

Leaders will be expected to function as “player-coaches,” actively contributing to execution while overseeing teams.

The company will also shift toward “AI-native pods,” including smaller teams and in some cases, “one-person teams”, capable of leveraging AI tools to deliver output at scale, he added.

What’s next for impacted employees?

For affected employees, the layoffs take immediate effect, with system access revoked the same day.

Impacted staff will receive severance packages, including a minimum of 16 weeks’ base pay for US employees, additional compensation based on tenure, equity vesting, and six months of healthcare coverage.

Employees on work visas will receive added transition support, while international staff will be offered comparable benefits in line with local regulations.

The company will also arrange follow-up meetings with HR and senior leadership to guide departing employees through the transition.

Shares of Coinbase were up about 3.3% in premarket trading.