Coinbase to cut 14% of workforce, citing volatile markets and AI

CRYPTO exchange Coinbase Global will cut around 14 per cent of its workforce, citing a need to manage costs in volatile markets and technological advances in artificial intelligence.

The company plans to concentrate remaining staff around AI skills while reducing layers of management, Coinbase chief executive officer Brian Armstrong said in an X post on Tuesday.

In this new structure, some teams may consist of just one person, he said, with responsibilities of engineers, designers and product managers combined into a single role.

“Two forces are converging at the same time,” he wrote. “We need to be front footed to respond to both.”

Around 700 employees will be affected by the changes, with cuts expected to happen mostly in the second quarter, Coinbase said in a filing. It expects to incur as much as US$60 million in restructuring expenses from the changes.

Coinbase’s move is the latest in a string of workforce reductions across the crypto and payments sectors, as businesses rush to lower costs while market demand is dampened.

Companies including Block and Gemini Space Station both slashed global staff numbers earlier this year, citing the pace at which AI is revamping operations across their respective businesses.

Coinbase’s revenue tumbled 20 per cent in the fourth quarter last year as falling token prices drained trading activity.

After registering an unrealised loss to mark down the value of its crypto holdings and investments, the company posted a net loss of US$667 million for that period, its most recent disclosure.

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“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,” Armstrong said on Tuesday.

Coinbase shares jumped as much as 8 per cent in pre-market trading on Tuesday. The exchange is due to report quarterly earnings on Thursday.

Coinbase wasn’t the only company to cut jobs on Tuesday. PayPal said it would cut costs and jobs as part of a turnaround plan, which aims to realise US$1.5 billion in savings over the next two to three years. BLOOMBERG