Coinbase is the latest financial and technology company to make workforce cuts due to AI, while also pointing to a crypto market that has declined in recent months.
Coinbase has become the latest technology firm to replace staff in preference for AI. CEO Brian Armstrong announced he would be letting go 14% of his workforce via a post on X on May 5.
He noted the company was set to slash up to 660 jobs (from 4,700 to 4,040) in part due to AI’s role in accelerating the time it takes to complete manual human jobs.
“The pace of what’s possible with a small, focused team has changed dramatically, and it’s accelerating every day,” said 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’s strategy now focuses on restructuring its leadership roles and leaning on AI-native talent to manage agents to continue to drive automation of daily operations.
Armstrong revealed its leadership structure will be at a maximum of five layers below the C-Suite level. This is because more layers “slow things down and create coordination tax”, as fewer layers enable the company to become more cost-effective.
He also announced there will be “no pure managers” at Coinbase, but ensured Managers should operate as player-coaches, being able to ‘get their hands dirty’ from time to time.
“We are not just reducing headcount and cutting costs, we’re fundamentally changing how we operate: rebuilding Coinbase as an intelligence, with humans around the edge aligning it,” added Armstrong.
An industry trend
Coinbase is the latest financial and technology firm to leverage AI by cutting its workforce over the past year. Gemini co-founders Cameron and Tyler Winklevoss announced in February 2026 they had laid off 25% of their workforce after stating AI software can be 100x more impactful than its manual software engineers.
Shortly after Gemini’s announcement, payment conglomerate Block axed up to 4,000 jobs as it continued to adopt AI to help “build and run a company”.
According to Block CEO, Jack Dorsey, the company’s adoption of AI has enabled it to do the same work output, if not more, with a smaller team with the assistance of AI.
Klarna has also used AI as a means to lay off some of its workforce, but not without initial challenges. In 2024, the buy-now, pay-later company announced it would cut up to 1,200 customer service jobs in favour of AI agents, but customer satisfaction dropped and the company ultimately rehired some staff in early 2025.
A bear(ish) market?
Armstrong also highlighted current crypto market conditions as a means to cut over 600 jobs as he noted “our business is still volatile from quarter to quarter”.
He acknowledged the industry is currently experiencing a down market after crypto assets such as Bitcoin reached all-time highs of $124,000 in July 2025, to as low as $68,000 in October 2025.
Despite this decline in what could be considered a ‘bear market’ in relation to the industry’s recent growth in the past several years, Armstrong is optimistic of the industry’s future, shaped by stablecoins, tokenisation and prediction markets.
“While we’ve managed through that cyclicality many times before and come out stronger on the other side, we’re currently in a down market and need to adjust our cost structure now so that we emerge from this period leaner, faster, and more efficient for our next phase of growth,” said Armstrong.
Crypto analysts are predicting a market bounceback in the next several months as US crypto bills edge closer to becoming law.
A major breakthrough in the Senate Banking Committee’s draft proposal of the CLARITY Act occurred this week as banking associations and crypto companies finally came to resolution to the fiercely debated stablecoin yield issue that has held up the proposal for the last several months.
A markup vote is now expected for mid-May which was championed by Armstrong, who posted on X: “Mark it up”.
