Coinbase, the largest U.S. cryptocurrency exchange, said on Tuesday it plans to lay off about 14 percent of its workforce due to volatility in the cryptocurrency market and how artificial intelligence is changing the way people work.
The cuts affect about 700 of the company’s nearly 5,000 employees, Coinbase said. corporate filingand the restructuring will cost about $50 million to $60 million in severance payments, severance and other expenses.
“AI is bringing a profound shift in how companies operate, and we are reshaping Coinbase to lead in this new era,” wrote Brian Armstrong, CEO of Coinbase. post on social networks about dismissal. “This is a new way of working and we need to use AI in all aspects of our work.”
Mr Armstrong said Coinbase plans to have smaller teams with people managing AI agents – digital robots to handle coding tasks – as well as human managers who will have to “get their hands dirty alongside their teams”.
Coinbase did not respond to requests for comment.
Coinbase is the latest tech company to point to AI as a reason for job cuts. While many industries have discussed how powerful technology could change the way they operate, one industry that is undoubtedly being disrupted is the technology industry itself. This is partly because AI tools have become more powerful at generating code, affecting the software engineers who are the backbone of many digital businesses.
In February, Block, a financial technology company, laid off 40 percent of its workforce, or roughly 4,000 people, citing rapid improvements in AI. Last month, Meta, which owns Facebook, Instagram and WhatsApp, said it planned to cut 10 percent of its workforce, or about 8,000 employees, and close another 6,000 open roles as it spends heavily on artificial intelligence.
Founded in San Francisco in 2012, Coinbase is a cryptocurrency exchange that allows people to buy and sell digital currencies like Bitcoin. The company said its revenue depends on the price of cryptoassets and the volume of trades on its platform.
In his post, Mr Armstrong said AI had led to an “inflection point”. He said the biggest risk was not taking action, so his company “adapted early and deliberately to rebuild Coinbase to be lean, fast and native with artificial intelligence.”
Mr Armstrong also cited the volatility of the cryptocurrency market as a reason for the current restructuring, saying: “We are currently in a down market and need to adjust our cost structure now.”
Coinbase will eventually have fewer layers below the CEO and COO, he said, and will move faster and more efficiently.
