-- Coinbase Global (COIN) is reducing its global workforce by 14%, citing the need to cut costs amid market volatility and how artificial intelligence has optimized its operations.
The planned restructuring will affect about 700 employees, with the execution expected to be substantially complete in the second quarter, the cryptocurrency exchange said Tuesday in a filing with the US Securities and Exchange Commission.
Coinbase is "well-capitalized" and has diversified revenue streams, Chief Executive Brian Armstrong said in a memo to employees that was shared on social media platform X. "Crypto is also on the verge of the next wave of adoption, with stablecoins, prediction markets, tokenization, and more taking off."
However, the company's business is still volatile from quarter to quarter, Armstrong said.
"While we've managed through that cyclicality many times before and come out stronger on the other side, 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 for our next phase of growth," he said.
The CEO also spoke about how AI has helped speed up Coinbase's operations in recent months.
"Over the past year, I've watched engineers use AI to ship in days what used to take a team weeks," he said. "The pace of what's possible with a small, focused team has changed dramatically, and it's accelerating every day."
Coinbase projects roughly $50 million to $60 million in restructuring expenses, mainly related to employee severance and other termination benefits and which will be recognized substantially in the ongoing quarter, the filing showed.
The company's shares were down 3.8% in Tuesday afternoon trade, bringing its year-to-date losses to roughly 14%.
"AI is bringing a profound shift in how companies operate, and we're reshaping Coinbase to lead in this new era," Armstrong said. "This is a new way of working, and we need to leverage AI across every facet of our jobs."
Coinbase is scheduled to report first-quarter financial results Thursday.
Price: $197.31, Change: $-5.68, Percent Change: -2.80%