Coinbase (COIN) stock climbed more than 4% in premarket trading Tuesday after the company announced it was cutting roughly 700 jobs, or about 14% of its workforce.
The company said the cuts are designed to manage operating expenses in response to current market conditions and to prepare for what it calls the “AI era.”
CEO Brian Armstrong shared the news in a memo posted to X, framing the move as necessary to keep Coinbase competitive through a difficult stretch in crypto markets.
This is an email I sent earlier today to all employees at Coinbase:
Team,
Today I’ve made the difficult decision to reduce the size of Coinbase by ~14%. I want to walk you through why we're doing this now, what it means for those affected, and how this positions us for the…
— Brian Armstrong (@brian_armstrong) May 5, 2026
“We’re currently in a down market and need to adjust our cost structure now so that we emerge from this period leaner, faster, and more efficient,” Armstrong wrote.
He described two forces driving the decision: a pullback in the crypto market and the rapid pace at which AI is changing how the company operates.
COIN has dropped around 10% since the start of January, weighed down by a broader crypto market that has shed roughly $1.6 trillion in total market cap this year.
Armstrong said Coinbase is not abandoning crypto. He pointed to stablecoins, prediction markets, and tokenization as the key drivers of the “next wave of adoption.”
The company estimates total restructuring charges of $50 million to $60 million, almost entirely from severance and termination costs. Coinbase expects to record all of those expenses in the second quarter.
Coinbase reports Q1 earnings on Thursday. Analysts surveyed by Bloomberg are forecasting a 50% decline in adjusted EBITDA compared to the same period last year.
Armstrong also said the company plans to flatten its management structure, capping organizational layers at five between senior leadership and the remaining roughly 4,300 employees.
This is not Coinbase’s first round of cuts during a down cycle. The company made deep reductions during the 2022 crypto market decline as well.
The latest move fits a wider pattern across tech. Block, Pinterest, CrowdStrike, and Chegg have all announced job cuts recently, with several citing AI as a factor in reducing headcount.
Armstrong stressed that the goal is to rebuild Coinbase as a leaner, AI-native company, not to pull back from crypto. “We need to return to the speed and focus of our startup founding, with AI at our core,” he said.
At close on May 4, COIN was trading at $202.99, up 6.14% on the day.
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