There is a kind of corporate announcement that tries to play it safe and be two things at once – a show of strength on the one hand, and an acceptance of reality on the other. Coinbase seems to have joined the group.
The crypto exchange company has announced that it is laying off about 14% of its workforce. According to Forbes, that’s about 700 employees, a few days before their first quarter 2026 earnings report on May 7. The restructuring is planned as an effective AI game. But the time, in the low crypto market with trading prices falling sharply despite Bitcoin trading above $ 81,000, makes it clear that this is also a movement of the cost of survival.
Coinbase (COIN) gained 4.1% on Tuesday, May 5, 2026, following the announcement, briefly hitting an intraday high of $208 before retreating below $200 nearby. The market’s initial enthusiasm gave way to skepticism, and the stock ended up lower. Earnings on May 7 will be the first real test of whether the restructuring shows Coinbase is smart, flexible, or a company under pressure.
Founder and CEO Brian Armstrong didn’t wear it yet. “We are preparing early and deliberately to rebuild Coinbase to be smaller, faster, and AI-native. We need to get back to speed and focus on our original innovation, with AI at our core,” Armstrong wrote on X.
Why Coinbase is restructuring around AI, and what it means for how the company will operate
Armstrong cited two forces driving the decision: the market cycle and the accelerating capabilities of artificial intelligence (AI).
The reason for AI is not window dressing. The reorganization will eliminate layers of management and eliminate the concept of “pure managers” altogether. Every leader must contribute. Armstrong described the new model as “players’ coaches, getting their hands dirty on the sidelines of their teams.”
More layoffs:
The new structure will focus on what Armstrong calls “traditional AI talent that can handle multiple agents to drive greater impact.”
Coinbase is also experimenting with much reduced team sizes, including one-person pods, where engineers, designers, and product managers fall into one role, according to Armstrong’s blog.
“The pace of what’s possible with a small, focused team has changed dramatically, and it’s accelerating every day,” Armstrong wrote.
The redesign drew immediate backlash from users who raised concerns about the production code being deployed by non-technical staff.
According to Yahoo Finance, the 2025 data breach that exposed 69,461 Coinbase accounts is still fresh in customers’ memories, and the prospect of AI-generated code being widely distributed has raised concerns. Armstrong responded directly, saying that all AI-generated code goes through human review before deployment.
Wall Street’s expectations for Coinbase’s May 7 earnings amid restructuring
The restructuring announcement comes just before the printing of one of the most significant profits in Coinbase’s recent history.
Coinbase analyst consensus on Q1 2026 projects:
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Revenue estimated at $1.50 billion, ranging from $1.39 billion to $1.77 billion
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Earnings per share of $0.10, with a wide range of loss of $0.77 to profit of $0.96.
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Last quarter’s EPS was a loss of $2.49, while revenue for that quarter came in at $705.93 million.
Source: TipRanks
The sequential jump in revenue from $705.93 million to $1.50 billion is considered to reflect the increased activity of the crypto market that defined the first quarter.
But trading volumes have since softened reasonably, prompting questions about whether Q1 represents a peak or a plateau.
Related: Goldman Sachs cuts Coinbase target as outlook turns cautious
Commentary sentiment towards the print is very positive. According to TipRanks, COIN received 14 buy ratings, seven hold ratings, and three sell ratings in the current month.
The average analyst price for the past three months sits at $260.60, which represents a significant upside to the metal’s current $197.75 May 5 closing price.
What Coinbase has to say again about where crypto companies are heading in 2026
Coinbase movements do not happen in isolation. Across the tech industry, companies are using the power of AI as a justification for downsizing, reducing headcount while claiming that smaller, AI-powered teams can deliver equal or greater results.
For Coinbase specifically, it is a bet that the AI ​​infrastructure can support growth through the crypto cycle down without the high costs that make the previous decline so painful. The company emerged from the crypto winter of 2022 with much less performance than it entered. Armstrong is trying to repeat that playbook before the pain gets worse.
The danger is real. User trust is already in trouble. The biggest data breach from 2025 is not forgotten. And telling clients that AI is now deeply embedded in code and running financial accounts takes more than a blog post to justify. The benefits of May 7 will answer financial questions, but the question of trust will take a while to be resolved.
Related: Cathie Wood buys $28.7 million of falling megacap stock
This story was originally published by TheStreet on May 6, 2026, where it appeared first in the investing category. Add TheStreet as a favorite source by clicking here.
