Coinbase, the largest U.S. crypto exchange, said on Tuesday that it planned to lay off about 14 percent of its workers amid volatility in the cryptocurrency market and as artificial intelligence changes how people work.
The cuts affect about 700 of the company’s nearly 5,000 employees, Coinbase said in a corporate filing, and the restructuring will cost about $50 million to $60 million in severance payments, termination benefits and other expenses.
“A.I. is bringing a profound shift in how companies operate, and we’re reshaping Coinbase to lead in this new era,” Brian Armstrong, Coinbase’s chief executive, wrote in a social media post about the layoffs. “This is a new way of working, and we need to leverage A.I. across every facet of our jobs.”
Mr. Armstrong said Coinbase planned to have smaller teams, with people who manage A.I. agents — digital bots that can handle coding tasks — as well as human managers who would need 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 A.I. as the reason for cutting jobs. While many industries have debated how the powerful technology might change the way they work, the one industry that is unquestionably being disrupted is the tech industry itself. That’s partly because A.I. tools have become stronger at generating code, which affects the software engineers who underpin many digital businesses.
In February, Block, the financial technology company, laid of 40 percent of its workers, or roughly 4,000 people, citing A.I.’s rapid improvement. Last month, Meta, which owns Facebook, Instagram and WhatsApp, said it planned to cut 10 percent of its work force, or roughly 8,000 employees, and close another 6,000 open roles, as it spends heavily on developing A.I. Microsoft also offered early retirement to thousands of long-serving employees last month as it looks to thin its ranks amid major A.I. investments.
Coinbase, founded in San Francisco in 2012, is a cryptocurrency exchange that allows people to buy and sell digital currencies like Bitcoin. The company has said its revenue depends upon the price of crypto assets and the volume of trades on its platform.
In his post, Mr. Armstrong said A.I. had led to “an inflection point.” He said the biggest risk was not to take any action and so his company was “adjusting early and deliberately to rebuild Coinbase to be lean, fast, and A.I.-native.”
Mr. Armstrong also cited cryptocurrency market volatility as a reason to restructure now, saying “we’re currently in a down market and need to adjust our cost structure now.”
Coinbase would ultimately have fewer layers under the chief executive and chief operating officer, he said, and would move more quickly and efficiently.
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