Coinbase CEO Brian Armstrong laid off roughly 14% of the company’s workforce on Thursday, citing a down market and the rapid acceleration of AI tools that have made smaller teams capable of doing what larger ones used to handle.
Armstrong disclosed the cuts in an email to all employees, which he then posted publicly on X.
“Over the past year, I’ve watched engineers use AI to ship in days what used to take a team weeks,” Armstrong wrote. “Non-technical teams are now shipping production code, and many of our workflows are being automated.”
He framed the layoffs as proactive rather than reactive. “The biggest risk now is not taking action,” he wrote. “We are adjusting early and deliberately to rebuild Coinbase to be lean, fast, and AI-native.”
Two forces, one round of cuts
Armstrong pointed to two converging pressures. The crypto market is in a down cycle, and while Coinbase has diversified revenue and enough capital to survive it, the quarter-to-quarter volatility demands a leaner cost structure. At the same time, AI has changed what a small team can accomplish, and Armstrong wants the company to be rebuilt around that reality.
“We need to return to the speed and focus of our startup founding, with AI at our core,” he wrote.
The org chart is getting flattened
The restructuring goes beyond headcount reduction. Armstrong outlined three structural changes to how Coinbase will operate going forward.
First, the company is capping its org structure at five layers below the CEO and COO. Leaders will carry 15 or more direct reports. The goal is fewer coordination bottlenecks and faster decision-making.
Second, Coinbase is eliminating pure management roles. Every leader will also be an active individual contributor. Armstrong described the model as “player-coaches, getting their hands dirty alongside their teams.”
Third, the company is building what it calls “AI-native pods,” small teams organized around people who can manage fleets of AI agents. Armstrong said Coinbase will experiment with reduced pod sizes, including “one person teams” where a single employee fills the engineer, designer and product manager roles simultaneously.
The severance package
U.S. employees affected by the cuts will receive a minimum of 16 weeks of base pay plus two additional weeks per year worked, their next equity vest, and six months of COBRA health coverage. Employees on work visas will get additional transition support. International employees will receive comparable packages adjusted for local requirements.
System access was revoked immediately. Armstrong acknowledged the abruptness but said it was necessary “given our duty to protect customer information.”
The pitch to whoever’s left
Armstrong closed the memo by reminding remaining employees that Coinbase has survived four crypto winters, went public, and built what he called “the most trusted platform in our industry.” He said the long-term outlook for both the company and the crypto industry hasn’t changed.
“The Coinbase that emerges from this will be more capable than ever to achieve our mission,” he wrote.
The layoffs mark the third major workforce reduction at Coinbase since 2022. The company cut 18% of its staff in June 2022 and another 20% in January 2023, both during previous crypto downturns. This time, AI cites market conditions as the stated justification for the billing, a combination that’s becoming increasingly common across the tech industry.
