Coinbase is cutting its workforce by 14%, or about 660 employees from a company of 4,700, two days before reporting its worst quarterly earnings in its history as a public company. CEO Brian Armstrong announced the layoffs in a letter to staff that briefly mentioned the cryptocurrency market crash and devoted most of its time to describing how artificial intelligence has changed the nature of work at the company.
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Coinbase’s future, Armstrong wrote, is “intelligence, with people at the periphery.” The restructuring eliminates purely managerial roles, narrows the organization to five levels below the CEO and COO, and introduces what the company calls AI-native pods: small teams, some as small as one person, that use AI tools to do what previously required a department. The phrasing is deliberate.
Armstrong doesn't present this as a cost-cutting measure imposed by a collapsing market. He presents it as a structural transformation that happens to coincide with it.
The coincidence is hard to ignore. Wall Street expects Coinbase to report revenue of about $1.5 billion for the first quarter of 2026, a 26% decline from the same period last year. Earnings per share are forecast at 36 cents, down from $1.94 a year ago. Revenue from consumer transactions fell 45% year over year to $734 million as cryptocurrency prices collapsed and merchants moved to lower-fee tiers.
Bitcoin its worst first quarter since 2018, falling between 22% and 24%. Ether fell 41%. Global cryptocurrency exchange volume fell nearly 48% from its October 2025 peak to $4.3 trillion in March, the lowest level since October 2024. Coinbase stock is trading 57% below its 52-week high of $444.65.
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The company's operating expenses rose 22% year-over-year to $1.5 billion, growing at more than double the rate of revenue, partly due to integration costs from the acquisition of derivatives exchange Deribit. The restructuring will cost between $50 million and $60 million in severance payments.
The only bright spot is institutional trading. Institutional trading revenue rose 31% year-over-year to $185 million, helped by Deribit’s record in derivatives. However, derivatives can’t make up for the collapse in consumer trading volume that has historically driven the majority of Coinbase’s revenue. The company guided for subscription and services revenue to a midpoint of $590 million for the first quarter, missing the Wall Street consensus of $761 million by 22% before the quarter even ended.
These aren't the numbers of a company restructuring because AI made it possible. These are the numbers of a company restructuring because the market made it necessary.
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Armstrong’s letter is carefully crafted. He acknowledged the decline, but framed the layoffs as an acceleration of a transformation that was already underway. “Engineers are using AI to deliver in days what used to take a team weeks,” he wrote. The restructuring eliminates purely managerial roles and emphasizes integrating AI into the company’s operations.
