Coinbase Cuts 14% Of Workforce In A ‘Harsh’ Reset Amid AI Shift – CEO Says Firm Built To ‘Weather Any Storm’

• Coinbase CEO Brian Armstrong said the firm is slashing 14% of its staff as it adjusts to market volatility and the increasing influence of AI on productivity.
• The organization is reorganizing to fewer management levels and smaller, high-impact teams to be leaner and quicker.
• The decision is forward-looking, Armstrong added, stating that laid-off employees would receive sixteen weeks of severance and assistance to help them transition.

Coinbase (COIN) Chief Executive Officer Brian Armstrong announced on Tuesday that the company will cut about 14% of its workforce as it adjusts to market conditions and the rapid rise of artificial intelligence. 

Armstrong said on X to employees that the move comes as crypto markets remain volatile and AI is drastically changing productivity for technical and non-technical teams alike, acknowledging his decision might seem “sudden and harsh.”

Armstrong added that the layoffs were part of a broader effort to make Coinbase “emerge from this period leaner, faster, and more efficient for our next phase of growth,” emphasizing flatter organizational structures, fewer management layers, and a greater focus on small, high-impact teams. 

Why Coinbase Is Flattening Its Organizational Structure?

He explained that Coinbase is flattening its structure to speed up decision-making and decrease bureaucracy, with a maximum of five levels below the CEO/COO. He underlined that fewer levels will reduce coordination costs, enable smaller, high-context teams to move more quickly, and encourage leaders to take on larger responsibilities with more direct reports, resulting in a leaner, more efficient organization.

The CEO stated that the decision was made proactively to prepare Coinbase for its next development phase, while also expressing faith in the future prospects for cryptocurrency, including stablecoins and tokenization. Acknowledging that the “business is still volatile from quarter to quarter,” he assured the firm is “well-positioned to weather any storm.” He defended the adjustments as required to retain speed and competitiveness at what he called an industry-wide tipping point. 

Severance And Benefits: What Coinbase Employees Get

Affected employees will receive severance packages, including a minimum of 16 weeks of base pay in the U.S., along with additional benefits and transition support. Armstrong acknowledged the impact of the cuts, thanking departing staff while reiterating Coinbase’s mission to build a more open financial system.

Previous Layoffs At COIN

Coinbase has undergone several rounds of layoffs in the past, particularly during the 2022 to 2023 "crypto winter.” In 2022, the business cut around 1,200 workers in two waves: June and November. According to reports, these decisions were driven by over-hiring during the 2021 bull market, a dramatic drop in crypto prices, a 27% decline in revenue, economic fears, and rising labor costs.

COIN stock was up over 3% in pre-market trade. On Stocktwits, retail sentiment around COIN remained in the ‘neutral’ zone, while chatter rose to ‘high’ from ‘normal’ levels over the past day. JPMorgan (JPM) analyst Kenneth Worthington boosted Coinbase's price target to $290 from $252, maintaining an 'Overweight' rating on the stock. At the current price of $206, an upside of over 40%. 

Read also: Coinbase Teams Up With Kemet To Power ‘Everything Exchange’ For Institutional Traders

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