Cryptocurrency exchange Coinbase has announced a significant restructuring initiative, which includes the layoff of approximately 700 employees, representing 14% of its total workforce. The move is aimed at enhancing operational efficiency and adapting to the inherent volatility of the crypto market, while also strategically integrating advanced artificial intelligence tools into its core operations.

As part of this overhaul, the company plans to flatten its organizational hierarchy, reducing the number of management layers to just five below the CEO and COO levels. This structural change will introduce new expectations for managers, requiring them to contribute more directly, and will allow leaders to oversee a larger number of direct reports, potentially exceeding fifteen individuals.

A key component of the restructuring involves a renewed focus on forming agile, smaller teams that can leverage AI technologies effectively. Coinbase plans to experiment with “one-person teams,” where individuals will undertake combined roles spanning engineering, design, and product management. CEO Brian Armstrong highlighted the transformative potential of AI, noting its ability to dramatically accelerate project timelines and automate various workflows, thereby enabling smaller, focused teams to achieve more.

The company anticipates incurring severance-related costs estimated between $50 million and $60 million as a result of these layoffs. Armstrong communicated to staff that while Coinbase has navigated market cycles successfully in the past, the current downturn necessitates a reevaluation of its cost structure. He emphasized the importance of emerging from this period as a leaner, faster, and more efficient organization, primed for its next phase of growth by strategically adapting to market conditions and technological advancements.