| ▲ | Saline9515 15 hours ago |
| The reality is that Coinbase earns on trading volume, and since we are in a crypto bear market, revenue is down. So they have to cut to keep the company profitable (or in line with what the investors expect). While AI is likely a productivity boost, the underlying reason is not AI. |
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| ▲ | chrsw 15 hours ago | parent | next [-] |
| Yes, I'm not buying this story about layoffs due to AI. It's a convenient excuse, which these companies seem to be getting away with too. And something else I don't get about these AI related layoff announcements: if AI was a productivity boost wouldn't you hire more engineers and technical staff to capture the value? Or else you're basically saying "we're a tech company that has no idea what to do with more super-engineers". |
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| ▲ | henryfjordan 7 hours ago | parent | next [-] | | The layoffs being "due to AI" is usually about freeing up the budget to build a couple datacenters and buy GPUs. And they have to layoff 14% of their workforce because they are buying those GPUs at many times the normal price thanks to the zeitgeist. They aren't saying that they don't know what to do with the AI productivity boost, but rather they think it worth taking a huge productivity hit right now so they can invest in the future. Whether their vision of the future is realistic... | |
| ▲ | Akababa 5 hours ago | parent | prev | next [-] | | There are diminishing returns to more engineers. Also hiring more is like investing with leverage. You might increase EV but also increase the chance of going bust if things go poorly. | |
| ▲ | ManuelKiessling 7 hours ago | parent | prev | next [-] | | Reading only the parts of the post that are not about AI does not instill the sense that Mr Armstrong is the kind of person who would hesitate to say that people are let go because the company wants/needs to save money. | | |
| ▲ | notahacker 6 hours ago | parent [-] | | Saying they're being let go due to the amazing efficiency of AI juices the stock prices more though. |
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| ▲ | jqbd 7 hours ago | parent | prev | next [-] | | This assumes they had a deficit of engineers pre-AI. What if they had as much as they needed? | | |
| ▲ | lmm 6 hours ago | parent [-] | | If engineering ability actually became cheaper you would want more of it, as ideas that were previously too marginal became worthwhile. | | |
| ▲ | zhivota an hour ago | parent [-] | | This assumes you have more valuable ideas than you can implement. Which, at first glance, seems like something you can take for granted. But in my career over 15 years I was surprised to find it's not the case for most established businesses. The existing business acts as a constraint that limits the idea space way down, and the ability for owners and product managers to generate ideas is way lower than I ever expected. Execution of unrelated ideas seems like a natural follow on, and having managed several such "labs" efforts, it's actually a good idea but it inevitably grinds up against the lack of will to continue investing in the face of headwinds, especially since the main business line is several orders of magnitude larger than anything labs can deliver in a foreseeable timeframe. |
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| ▲ | missedthecue 4 hours ago | parent | prev [-] | | At this point, I truly do not believe there is anything that could happen that would convince HN that LLMs reduce demand for engineering labor hours. | | |
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| ▲ | davesque 3 hours ago | parent | prev | next [-] |
| Yeah AI is the perfect scapegoat for layoffs recently to soften the impact on stock price and investor confidence. Coinbase is obviously doing layoffs because they are strongly tethered to a stock market that is rattled by political conflict and economic uncertainty. |
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| ▲ | evdubs 4 hours ago | parent | prev | next [-] |
| Indeed. COIN releases earnings on May 7 in the evening. Q4 2025 was the first quarter where they had a negative EPS in the past couple years. Most analyst estimates for Q1 2026 are trending downward. This "difficult decision" seems to be all about getting in front of a bad earnings release. |
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| ▲ | apple4ever 8 hours ago | parent | prev | next [-] |
| Oh yeah, AI is just an excuse to sell it to the public. But it's not about that at all. It's about bad leadership. |
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| ▲ | zindlerb 7 hours ago | parent | prev | next [-] |
| Isn't this what he says in the post? The first reason listed is market cycle not ai. |
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| ▲ | RIMR 6 hours ago | parent [-] | | Yeah, but imagine if he had said that AI was the reason, and how wrong he would have been if he had said that. |
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| ▲ | nikcub 7 hours ago | parent | prev [-] |
| They're so tied to crypto that i'm surprised they haven't been tempted to diversify into other asset classes, or even yolo into prediction markets like robinhood did. It would be slop, but the market would love it |
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| ▲ | qingcharles an hour ago | parent | next [-] | | I was logged in when I read your comment, so I flicked over to the tab to see what they have. There is a whole "Predict" section of the site I'd not looked at before with sports betting, elections, commodities etc. | |
| ▲ | gip 7 hours ago | parent | prev | next [-] | | Very curious why they haven’t diversified into real world assets. It seems like an obvious move, even if the margins would be lower than their fee business (~85% margins!!). They’ve added tokens and altcoins to the platform, but I don’t think that’s a particularly strong long-term bet. | | |
| ▲ | nly 6 hours ago | parent [-] | | Because real world assets are heavily regulated and regulation has costs. The competition is also stiff with decades of experience and network effects The truth is these crypto shops have a pretty poor reputation in the traditional finance industry. Nobody in trading tech goes to work for them unless they offer insane salaries, because they (we) know it's an unstable place to be. | | |
| ▲ | mothballed 6 hours ago | parent [-] | | It's going the opposite direction. Those offering real world and tradfi assets are moving into the crypto space. That is going to eat Coinbase's lunch. The worst part of using something like Coinbase is having to do yet another bank transfer, waiting for it to clear, doing KYC/AML yet again, etc etc for what most people is just to buy one or two single asset (BTC or maybe ETH probably). Instead just click buy in Robinhood or Schwab along with everything else. | | |
| ▲ | nly 6 hours ago | parent | next [-] | | The major prop shops and market makers are all over crypto, for sure. But they're only there because these markets are poorly regulated and there's a lot of retail juice to squeeze. A friend of mine works for one of the major crypto firms and they're starting to deploy algorithmic trading bots on their own exchange. The spreads on these markets can be diabolical | |
| ▲ | gip 4 hours ago | parent | prev [-] | | That makes sense, thank you for explaining. TradFi already offer access (direct or ETFs) to major cryptos who have demonstrated some utility like BTC, ETH, XRP, SOL and a few others. If interest in tokens and altcoins wanes, Coinbase may be in a weak position. |
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| ▲ | lxgr 6 hours ago | parent | prev [-] | | Have they not? When I log in, I'm given the option to trade (apparently stocks, futures, commodities) and predict (via Kalshi, I think). | | |
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