Coinbase to cut 14% of workforce, points to AI and market volatility

(Sharecast News) - Coinbase announced on Tuesday that it was cutting its workforce by around 14% as it pointed to market volatility and the use of artificial intelligence.

The cryptocurrency exchange noted in a blog post that it is currently in a down market and needs to adjust its cost structure so that it can "emerge from this period leaner, faster, and more efficient" for its next phase of growth.

It also highlighted the fact that AI is changing how the company works.

"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. The pace of what's possible with a small, focused team has changed dramatically, and it's accelerating every day," said chief executive Brian Armstrong.

"All of this has led us to an inflection point, not just for Coinbase, but for every company. The biggest risk now is not taking action. We are adjusting early and deliberately to rebuild Coinbase to be lean, fast, and AI-native. We need to return to the speed and focus of our startup founding, with AI at our core."

Coinbase said it was not just cutting headcount and costs but "fundamentally" changing how it operates. Under the new plans, the company will flatten its organisation structure to a maxium of five layers below CEO/COO. It argued that layers slow things down and create coordination tax.

"The future is small, high context teams that can move quickly," said Armstrong. "Leaders will own much more, with as many as 15+ direct reports. Fewer layers also means a leaner cost structure that is built to perform through all market cycles."

The new structure will also mean there are no pure managers and Armstrong said the company will concentrate around "AI-native talent who can manage fleets of agents to drive outsized impact".