Coinbase on Tuesday announced a 14% reduction in its workforce, which CEO Brian Armstrong said was in preparation for a “new way of working” based on artificial intelligence, not a defensive reaction to market conditions.
In a companywide email, Armstrong cited two factors behind this move: the persistence of crypto market cycles and the changing pace of internal operations due to AI.
Coinbase engineers are using AI to ship things in days that would take a full team weeks to complete, and the pace of change is accelerating rather than stagnating, Armstrong wrote.
Coinbase had 4,951 employees as of December 31, 2025, with an estimated 693 employees affected. Employees leaving the U.S. will receive a minimum of 16 weeks of base pay, plus two weeks of annual service, upcoming stock vesting, and six months of COBRA health insurance.
Employees with work visas receive additional transition support. Access to the system was cut off on the day of the announcement. Armstrong acknowledged this was a harsh move, but defended it as a matter of protecting customer data.
The layoffs follow a pattern stretching back to 2022. In June of the same year, Coinbase cut 18% of its workforce (1,100 roles) due to falling crypto prices and growing concerns about an economic recession. A second significant 20% reduction in 950 employees took place in January 2023 following FTX’s bankruptcy and prolonged market contraction. The two rounds resulted in more than 2,100 headcount reductions. Each time, Armstrong positioned pain as the foundation for a stronger company on the other side.
Coinbase: AI is changing our company
This round includes a structured discussion that was not present in the previous two rounds. The cuts in 2022 and 2023 were a market reaction. According to Armstrong’s framework, the reorganization in 2026 will be a redesign of corporate operations using AI.
After securing enterprise licenses for tools like GitHub Copilot and Cursor, he fired engineers who refused to implement them and set a goal for Coinbase to have 50% of its code written with AI.
The logic of the latest cuts extends that mandate: If AI increases the output of small teams, it will hold back the performance of large teams.
The organizational chart changes outlined by Armstrong are far-reaching. The company will be flattened within five levels under the CEO and COO. Every leader must assume the role of an active individual contributor, a “player-coach” model. Cross-functional “AI-native pods” replace traditional team structures and experiment with one-person teams that combine engineering, design, and product responsibilities into one role.
COIN stock is trading near $210 in pre-market trading, just a fraction of the stock’s late-2024 highs.
This article, Coinbase cuts 14% of workforce, hints at AI-driven future, originally appeared in Bitcoin Magazine and was written by Micah Zimmerman.
