Written by: Yangz, Techub News
During the May Day holiday, Bitcoin successfully rose from about 76,000 dollars to over 80,000 dollars. However, just as the market began to show signs of recovery, Coinbase CEO Brian Armstrong dropped a piece of news last night: a 14% layoff.
As for the reason for the layoffs, Brian Armstrong attributed it to the convergence of two forces: one is the "persistent volatility of the cryptocurrency market," and the other is "AI is bringing about profound changes in the way companies operate." To be honest, the layoffs at this point are not too surprising, after all, the chill of the cryptocurrency market has lasted for a long time, and how long the increase during the holiday can last is still uncertain. What leaves many feeling helpless is that AI has once again appeared in the reason for the layoffs.
Indeed, this is not the first time we have heard Web3 companies using "AI" to explain layoffs. Earlier this year, Jack Dorsey's payment service Block laid off over 4,000 people, with a layoff rate close to 50%, citing AI iteration as the reason; additionally, Gemini and Crypto.com also laid off 30% and 12% respectively, each linking their reasons to AI. It seems that overnight, AI has become a sword that can be wielded to cut labor costs.
Three Major Layoffs in Four Years
In fact, this is the third large-scale layoff by Coinbase in four years.
In June 2022, Bitcoin fell below 22,000 dollars, leading Coinbase to lay off 18%, about 1,100 people. The reason was "the market is entering a recession, and cryptocurrencies may face a long winter"; in January 2023, with the aftermath of the FTX collapse still present, Coinbase laid off another 20%, about 950 people. The reason was "further cost-cutting to address the survival crisis."
It is not hard to see that the reasons for the first two layoffs were highly consistent, both being passive responses to the winter of the market. However, this time, market pressure is just one of the reasons; more importantly, Armstrong characterized this layoff as a "turning point" in resetting the company’s operating model under the era of artificial intelligence.
In an open letter, he mentioned that the future company structure will reduce management levels beneath the CEO and COO, implement a "player-coach" model, and even explore the possibility of a "one-person team." Additionally, according to Bitcoin Magazine report, Armstrong revealed that engineers who refused to use AI tools like GitHub Copilot and Cursor have been fired and set a target of 50% of the code in Coinbase being written by AI.
On the surface, this rhetoric is entirely coherent, not only aligning with the current technological trend but also can be interpreted as an ambitious "self-revolution". However, a detail from the capital market might expose its more genuine motivation. After the layoff news was announced, Coinbase’s stock price rose by about 4%. The enthusiasm shown by Wall Street was not because people truly believe AI can immediately bring about a qualitative change for Coinbase, but because framing layoffs as a proactive narrative of "cutting labor costs" was a smarter path to improve financial statement expectations during a bear market compared to merely attributing them to the market environment.
In fact, Coinbase is indeed facing significant financial pressure. According to its financial report released in February, Coinbase reported a net income decline of 21.5% year-on-year to 1.78 billion dollars in the fourth quarter of last year, with a net loss reaching 667 million dollars, ending a streak of eight consecutive quarters of profit. Considering that Coinbase plans to officially release its first-quarter financial report for this year after U.S. stock trading on May 7, attributing the "urgency" of this layoff to AI seems more like a clever narrative packaging—combining short-term pressure with long-term technological trends, it not only aligns with the hottest topic in the tech industry, AI, but also provides a more respectable explanation for the layoffs than "shrinking performance."
Layoff Wave and "Death List"
Coinbase's layoffs are not an isolated case. Expanding the view to the entire Web3 industry, the spring of 2026 seems more like a collective "self-amputation for survival".
First, let's look at the spread of the layoff wave. As mentioned earlier, Block, Gemini, and Crypto.com all cited AI as a significant reason for layoffs; additionally, there are numerous cases of layoffs due to pure market pressure or strategic transformation. Bitcoin mining company MARA laid off about 15% of its workforce, shifting towards energy and digital infrastructure; the Algorand Foundation laid off 25% of its staff, citing "to cope with the uncertain global macro environment and the overall slumber of the cryptocurrency market"; PIP Labs, the developer of Story Protocol, laid off about 10% in the shift to AI intellectual property infrastructure; OP Labs CEO Jing Wang stated he would lay off 20 people to streamline the business, expedite decision-making, and reduce coordination costs.
Within the industry, there are diverse opinions regarding the wave of layoffs attributed to "AI".
Changpeng Zhao, co-CEO of Binance, stated at the 2026 Hong Kong Web3 carnival that Binance would not cut costs and increase efficiency through layoffs like most tech companies, but instead leverage AI to enhance organizational output and innovation capacity, aiming to grow from 300 million users to 3 billion. Zhao also directly commented on Block's layoffs saying that companies must learn to maximize AI, or face layoffs themselves.
Furthermore, after the cryptocurrency research organization Messari announced a transformation to "AI-first" and disbanded its research team, its research analyst Sam stated: "I can confidently say that high-quality thought leadership is currently the most underestimated resource in the cryptocurrency field. The mediocrity of AI-driven writing and reasoning has led many to believe it can replace research analysts. I assure you—it cannot."
If layoffs at least indicate that companies are still operating, then "shutdown" is a much harsher reality. According to incomplete statistics, in just the first quarter of 2026, more than 20 funded Web3 projects announced closures or indefinite halts of operation.
Among them, Leap Wallet, once one of the most mainstream super wallets in the Cosmos ecosystem, will completely shut down on May 28; Tally, a DAO governance platform serving several large governance organizations such as Uniswap, Arbitrum, and ENS, announced the cessation of operations in March; Magic Eden Wallet, a multi-chain wallet under a leading NFT market, has stopped service since May 1 to focus on the Solana ecosystem due to narrowing of operations; Dmail Network, a well-known Web3 privacy email system, announced a phased shutdown of all operations starting May 15 due to funding difficulties and user retention challenges.
The names on this "death list" span across various sectors, collectively outlining a harsh picture of the Web3 industry in the first quarter of this year. In such an environment, whether AI is the true reason for layoffs or merely a fig leaf for failures and contractions may have different answers in each company’s heart.
Conclusion
Looking back, this round of layoffs at Coinbase is merely a microcosm of the Web3 winter of 2026. And packaging layoffs, which originally need to be executed due to poor management and a cooling market, as an inevitable result of technological advancement has been assigned a sarcastic term within the industry: AI-washing.
OpenAI CEO Sam Altman candidly stated: "I do not know what the exact proportion is, but some people attribute layoffs to artificial intelligence when in reality they would have laid off anyway"; a16z founder Marc Andreessen described AI as a "silver-bullet excuse" in the hands of executives, believing that many executives use AI as an excuse because it sounds much "sexier" than admitting to "strategic mismanagement" or "stagnation in business growth" and is more easily accepted by Wall Street; as the biggest benefactor of the AI wave, Jensen Huang has repeatedly reiterated: using AI to reduce personnel is an evasion of corporate responsibility, and truly excellent CEOs should leverage AI to develop new business rather than merely to oust existing employees.
Perhaps some companies are indeed gravitating towards AI, but the prevalence of AI-washing also seems to stem from a form of industry competition. Admitting to "business failure" is akin to declaring death, while announcing a "transformation to AI" seems to raise a new flag. As more and more companies resort to AI for layoffs, we might as well ask: if there were no AI, would these layoffs still occur?
The answer is most likely affirmative.
Web3 is experiencing an unprecedented brutal clearance. Every name on that long "death list" represents a depletion of liquidity, an overload of cognition, and the wear and tear of a multi-year bear market. They die from funding break, they die from user exit, they do not, however, die from "not being enough AI."
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