Coinbase lays off 14% of employees as part of broader restructuring

Cryptocurrency exchange Coinbase said Tuesday it is laying off about 700 employees, or 14%, as part of a broader restructuring to address market volatility and increase its use of AI tools to improve efficiency.

The restructuring will see the company simplify its organizational structure to five tiers below the CEO and COO levels, according to an internal email posted on the company’s blog by the company’s CEO, Brian Armstrong.

The reorganization implemented new requirements to allow managers to contribute more, and leaders can now have more than 15 direct reports. The company is also focused on building small teams using AI tools and will experiment with ‘one-person teams’ that combine engineering, design and product management roles.

Coinbase said in an SEC filing that it expects to incur severance costs of about $50 million to $60 million.

In the email, Armstrong cited volatility in the cryptocurrency market as a reason to reexamine the company’s cost structure.

“We have managed this cyclicality many times before and come out stronger on the other side, but we are currently in a bear market and must now adjust our cost structure to ensure we emerge from this period leaner, faster and more efficient for the next phase of growth,” he wrote.

He also emphasized the need to make the most of AI tools. “AI is transforming the way we work. Over the past year, I have seen engineers use AI to ship work in days that used to take teams weeks. Non-technical teams are now shipping production code, and many workflows are being automated. The speed of what is possible with small, focused teams has changed dramatically and is accelerating every day. (…) This is a new way of working and we must leverage AI in every aspect of our company and jobs.”