Coinbase is cutting 14 percent of its workforce, roughly 660 employees from a company of 4,700, two days before it reports the worst quarterly earnings in its history as a public company. CEO Brian Armstrong announced the layoffs on Tuesday in a letter to staff that mentioned the crypto market downturn in passing and spent most of its length describing how artificial intelligence had changed the nature of work at the company. The future of Coinbase, Armstrong wrote, is “intelligence, with humans around the edge.”
The numbers
Wall Street expects Coinbase to report revenue of roughly 1.5 billion dollars for the first quarter of 2026, a 26 percent decline from the same period last year. Earnings per share are forecast at 36 cents, down from 1.94 dollars a year ago. Consumer transaction revenue fell 45 percent year on year to 734 million dollars as cryptocurrency prices collapsed and traders migrated to lower-fee tiers. Bitcoin recorded its worst first quarter since 2018, falling between 22 and 24 percent. Ether dropped 41 percent. Global cryptocurrency exchange volume fell nearly 48 percent from its October 2025 peak to 4.3 trillion dollars in March, the lowest level since October 2024. Coinbase’s stock is trading 57 percent below its 52-week high of 444.65 dollars. The company’s operating expenses rose 22 percent year on year to 1.5 billion dollars, growing at more than twice the rate of revenue, driven in part by integration costs from its acquisition of the derivatives exchange Deribit. The restructuring will cost between 50 and 60 million dollars in severance. The one bright spot is institutional trading. Revenue from institutional transactions grew 31 percent year on year to 185 million dollars, supported by Deribit’s record quarter in derivatives. But derivatives cannot compensate for the collapse in consumer trading volume that has historically driven the majority of Coinbase’s revenue. The company guided subscription and services revenue to a 590 million dollar midpoint for the first quarter, missing Wall Street’s consensus of 761 million dollars by 22 percent before the quarter had even finished.
The restructuring
The restructuring eliminates pure management roles, caps the organisation at five layers below the CEO and COO, and introduces what the company calls AI-native pods: small teams, some as small as a single person, that use AI tools to do what used to require a department. Armstrong told employees that Coinbase plans to hire only people with strong AI skills going forward, and that the company’s future depends on being “AI-first in everything.” The framing is deliberate. Armstrong is not presenting this as a cost cut forced by a collapsing market. He is presenting it as a structural transformation that happens to