Compass Investments

– Coinbase is cutting about 14% of its staff, CEO Brian Armstrong notified on Tuesday, pointing to the downturn in the cryptocurrency market and productivity changes triggered by artificial intelligence. Armstrong said the exchange is realigning itself around AI, with humans on the periphery, simplifying its hierarchy to no more than five levels of reporting below CEO/COO.

U.S. employees affected by the layoffs will receive a minimum of 16 weeks of salary plus two weeks for each year worked, a follow-on equity package and six months of COBRA coverage.

cryptocurrency exchange Coinbase is laying off about 14% of its staff, CEO Brian Armstrong said Tuesday, attributing the move to a response to the downturn in crypto assets and a deeper shift to an operating model focused on artificial intelligence.

We’re not just downsizing and cutting costs – we’re fundamentally changing the way we operate: transforming Coinbase into an intelligence-centric entity with people on the edges building it out, Armstrong wrote in a memo, which he then tweeted Wednesday morning.

I sent this message to all Coinbase colleagues today:

the team,

Armstrong emphasized the volatility of the cryptocurrency market, noting that we are experiencing a market downturn and must quickly adjust our cost structure, adding that AI has changed the way we operate on the exchange.

Over the past year, I’ve watched engineers use AI to create in days what teams used to take weeks to do, his message read. Non-technical departments are now implementing working code, and many of our workflows have become automated.

The layoffs represent a structural reorganization for one of the most prominent publicly traded companies in the crypto industry, taking place amid ongoing AI-related layoffs in the tech and crypto sectors as a whole.

economists at Goldman Sachs last month estimated that AI-driven job substitution results in the loss of about 25,000 U.S. jobs each month, while the augmentation effect only brings in about 9,000 – resulting in about 16,000 positions disappearing each month.

As a result of this restructuring, Coinbase’s organizational chart will be streamlined to five levels of hierarchy below the CEO and COO leadership positions, purely managerial roles will be eliminated, and all executives will be instructed to remain active performers.

Recruitment will focus on what are known as “AI-native pods, which include one-person experimental teams that combine development, design and product functions. {

“Executives will supervise significantly more subordinates, up to 15 direct contacts, Armstrong said.

The news comes weeks after Coinbase announced it was testing AI agents modeled after co-founder Fred Ehrsam and former CTO Balaji Srinivasan, who were deployed internally to provide tactical ideas and creative suggestions to employees. Armstrong said at the time that the company might soon have

“more agents than employees”.