May is kicking off with another brutal round of tech layoffs that have been affecting the industry for much of the year. Today, the U.S.’s largest cryptocurrency exchange, Coinbase Global, Inc. (Nasdaq: COIN), announced it was laying off a staggering 14% of its staff.
The company’s CEO says one of the main drivers of those layoffs is AI adoption at the company. Here’s what you need to know.
Coinbase cuts hundreds of jobs in ‘AI-native’ restructuring
This morning, Coinbase CEO Brian Armstrong posted a letter on X that he sent to the company’s nearly 4,700-strong workforce. In the letter, Armstrong announced that Coinbase was letting go of around 14% of its staff, or roughly 700 employees.
The CEO said two factors were at play behind the layoffs. First, the company’s business is highly volatile, and the crypto industry is in a downward market. As a result, Coinbase needs to adjust its cost structure. And one of the fastest ways to cut costs is always by cutting human labor.
But Coinbase apparently isn’t too worried that letting go of hundreds of talented people will hurt the company in the long term. That’s because Armstrong seems adamant that artificial intelligence will allow the company to operate more efficiently.
The CEO spent a large portion of his letter to employees espousing the benefits of AI to the company’s operations and bottom line, noting that over the past year he has “watched engineers use AI to ship in days what used to take a team weeks.”
Indeed, Armstrong says that the biggest risk to the company is “not taking action.”
