Coinbase intends to lay off 14% of employees as part of a broader restructuring

Cryptocurrency exchange Coinbase said Tuesday it will lay off about 700 employees, or 14% of its staff, as part of a broader restructuring aimed at addressing market volatility and increasing the use of artificial intelligence tools to improve efficiency.

The restructuring will see the company flatten its organizational structures to just five layers below the CEO and COO level, according to an internal email sent by the company’s CEO Brian Armstrong. Posted on the company blog.

The reorganization will implement new requirements for managers to contribute more, and leaders can now have more than 15 direct reports. The company is also focusing on small teams using AI tools, and will test “one-person teams” that combine engineering, design, and product management roles.

Coinbase expects to incur approximately $50 million to $60 million in severance costs, it reported to the Securities and Exchange Commission. Deposit.

In the email, Armstrong cited the volatility of cryptocurrency markets as a reason to reconsider the company’s cost structure.

“Although we have been able to weather this cyclicality many times before and come out stronger on the other side, we are currently in a bear market and need to adjust our cost structure now so that we emerge from this leaner, faster and more efficient for our next phase of growth.”

He also highlighted the need to make the most of AI tools: “AI is changing the way we work. Over the past year, I’ve watched engineers use AI to ship what used to take a team weeks in days. Non-technical teams are now shipping production code and many of our workflows are being automated. The pace of what’s possible with a small, focused team has changed dramatically, and is accelerating every day (…) This is a new way of working, and we need to leverage AI in every aspect of our jobs.”