Coinbase to lay off 14% of staff as part of broader restructuring

Cryptocurrency exchange Coinbase on Tuesday announced it will lay off about 700 people, or 14% of its workforce, as part of a broader restructuring aimed at responding to market volatility and increasing its use of AI tools to improve efficiency.

The reorganization will flatten the organizational structure from the CEO and COO level to just five levels below, according to an internal email posted by CEO Brian Armstrong on the company’s blog.

The reorganization introduces new requirements for managers to contribute more, allowing leaders to have more than 15 direct reports. The company is also focusing on building smaller teams to use 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 generate approximately $50 million to $60 million in severance payments.

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

“We have weathered many economic cycles and come out stronger, but the market is currently in a downturn and we need to adjust our cost structure now to get through this period leaner, faster and more efficiently and emerge into the next phase of growth,” he said.

He also emphasized the need to make the most of AI tools. “AI is changing the way we work. Over the past year, we’ve seen engineers use AI to ship work in days that previously took teams weeks. Non-technical teams are now shipping product code, and much of their workflow has been automated. The pace of what small, focused teams can do has changed dramatically, and it’s accelerating by the day (…) This is a new way of working, and AI is in every aspect. About our work.