Quick overview

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Coinbase stock rallied north after plans to reduce its workforce by about 14%.  Coinbase CEO Brian Armstrong stated that the company intends to reduce layers of management and focus the remaining employees on AI skills. According to him, some teams in this new structure might have one member, combining the duties of product managers, engineers, and designers into a single position.

He wrote, “Two forces are converging at the same time.” We must be proactive. According to a filing from the New York-based company, “about 700 employees will be affected by the changes, with cuts expected to happen mostly in the second quarter.” It anticipates that the changes will result in restructuring costs of up to $60 million.

Coinbase’s action is the most recent in a series of layoffs in the payments and cryptocurrency industries as companies scramble to cut expenses as market demand falls. Businesses such as Block Inc., Gemini Space Station Inc., and Crypto.com reduced their employees worldwide earlier this year, citing that AI is transforming business operations.

Dan Dolev, an analyst at Mizuho Securities with a neutral recommendation on Coinbase’s stock, stated that “the crypto winter is probably the real reason for most of the cuts.” AI, for the most part, is likely an “easy excuse,” he added. After rising as much as 8% before the market opening on Tuesday, Coinbase shares were up 0.5% in early trading.

The exchange is scheduled to release its quarterly earnings. The company’s revenue fell 20% in the fourth quarter of last year following the registration of an unrealized loss to reduce the value of its cryptocurrency holdings.

Armstrong had previously said that Coinbase benefited from the cryptocurrency market volatility. With almost 5,000 full-time employees at the end of 2025, the exchange saw a quarterly headcount increase of 3% in departments like customer service and product development. “In general, I kind of enjoy these periods sometimes — when the market is down, ironically, just because it allows us to keep building,”