AI continues to appear to cause layoffs at top tech companies.
Coinbase has announced it is cutting roughly 14% of its workforce, with CEO Brian Armstrong citing both a difficult crypto market and the sweeping impact of artificial intelligence on how the company operates. The move follows a now-familiar pattern across the tech industry, where executives are using AI-driven efficiency as justification — or cover — for significant headcount reductions.
Armstrong’s Case For Cutting
In a memo to employees, Armstrong framed the layoffs as both reactive and strategic. On the market side, he acknowledged that Coinbase’s revenue remains volatile quarter to quarter despite the company being well-capitalized, and that a down cycle requires leaning out the cost structure. But it was his comments on AI that stood out.
“Over the past year, I’ve watched engineers use AI to ship in days what used to take a team weeks,” Armstrong wrote. “Non-technical teams are now shipping production code and many of our workflows are being automated.” His conclusion: the scale of what a small team can now accomplish has changed so fundamentally that maintaining the existing headcount would be a mistake. “The biggest risk now is not taking action,” he said.
Rebuilding Around AI
The layoffs are accompanied by a deeper restructuring. Armstrong wants Coinbase to become what he calls an “intelligence” — a company where AI agents do the heavy lifting and humans operate at the edges, providing alignment and direction. Concretely, this means flattening the org to a maximum of five layers below the CEO and COO, eliminating pure management roles in favor of player-coaches, and experimenting with “one-person teams” where a single employee handles engineering, design, and product management.
It’s a vision that would have sounded radical two years ago. Today, it’s almost conventional. Block laid off 4,000 employees — nearly 40% of its workforce — in February, with Jack Dorsey explicitly citing AI. Pinterest cut 15% of its staff in January, also citing AI. IBM has warned that thousands of roles could be replaced by the technology. McKinsey cut 200 tech jobs as it automated internal functions — and now reportedly counts 20,000 AI agents among its workforce of 60,000.
The Severance Package
Affected US employees will receive a minimum of 16 weeks of base pay, plus two additional weeks for each year of tenure, their next equity vest, and six months of COBRA health coverage. Employees on work visas will get extra transition support. Armstrong acknowledged the abruptness of the move — Coinbase system access was cut immediately — but called it “the only responsible choice given our duty to protect customer information.”
A Pattern Worth Watching
Whether AI is genuinely driving these decisions or providing a convenient narrative is a live debate. Marc Andreessen has argued that the real culprits behind today’s tech layoffs are post-pandemic overhiring and rising interest rates, not AI — noting that executives have learned that “we’re reallocating resources toward AI” lands better with investors than “we over-hired during a bubble.” The observation isn’t without merit: Coinbase’s cuts come during a crypto down cycle, which would justify headcount reductions on its own.
Still, the structural changes Armstrong is describing — flatter hierarchies, smaller pods, AI-native workflows — point to something more permanent than a cyclical adjustment. Armstrong isn’t just trimming costs; he’s betting that the company that comes out the other side will require fewer people to do more. Whether that bet pays off, for Coinbase or for the employees now left behind, remains to be seen.