Just-In: Coinbase Cuts Workforce By 14% In AI Shift Ahead Q1 Earnings

CEO Brian Armstrong has announced a massive workforce reduction at Coinbase. The exchange is reducing about 14% of its staff as the company changes its operating model to rely on AI. Moreover, the announcement is deemed important as it comes on the heels of the Q1 2026 earnings report.

Coinbase Slashes Workforce By 14%, Shifts To AI

Armstrong shared an internal email on X today. The email noted that this move was a “difficult decision.” He outlined reasons such as market conditions and their rapid progress in artificial intelligence.

He wrote, “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.”

The CEO pointed to the fact that AI is fundamentally transforming productivity throughout the company. Armstrong said “I’ve watched engineers use AI to ship in days what used to take a team weeks.”

He further added that even non-technical teams are now producing code worthy of production. He said this change has put Coinbase at an “inflection point.”

Thus, Coinbase has also decided to flatten its organizational structure, reduce layers of management. It aims to focus on AI-native pods as part of the restructuring. Armstrong also envisions the future system as “small, high context teams” with their leaders serving as “player-coaches” and not managers.

Meanwhile, the affected employees will get severance packages. It consists of a minimum of 16 weeks of base pay in the U.S. plus other benefits and transition support.

Although Coinbase may encounter certain challenges in the short term, Armstrong is optimistic about the long-term outlook. He said “Nothing has changed about the long term outlook of our company or industry.” He added that the mission of Coinbase of “increasing economic freedom” through a new financial system has also not changed.

A Look At Q1 Earnings Expectations & COIN Stock Performance

Moreover, it’s important to note that the layoffs occur just days before Coinbase is due to report its Q1 2026 earnings on May 7. Analysts are projecting a drastic decrease, with earnings per share (EPS).

Consensus estimates show that Coinbase EPS could drop to $0.36, a year-over-year decrease of 81.4%. Meanwhile, the revenue is estimated to fall to $1.5 billion from $1.78 billion in Q4 FY25.

Nonetheless, despite the weak earnings estimates and company layoffs, the COIN stock has continued gaining. At press time, the COIN stock price was up by 4.09% to $211.29 in the pre-market trading session on Tuesday, May 5.

Moreover, the Coinbase shares closed 6.14% higher on Monday at $202.99. Earlier, the stock suffered due to New York and Wisconsin lawsuits.