During the May Day holiday, Bitcoin successfully climbed from approximately $76,000 to over $80,000. However, just as the market showed signs of recovery, Coinbase CEO Brian Armstrong announced last night that 14% of its workforce would be laid off. As for the reasons for the layoffs, Armstrong attributed them to the convergence of two forces: "the continued volatility of the crypto market" and "AI is bringing profound changes to how businesses operate." Frankly, layoffs at this time are not too surprising, given the prolonged downturn in the crypto market and the uncertainty surrounding how long the holiday rally will last. What truly disheartens many is the reappearance of AI in the layoff reasons. Yes, this isn't the first time we've heard of Web3 companies using "AI" to explain layoffs. Earlier this year, Jack Dorsey's payment service provider Block laid off over 4,000 people, nearly 50% of its workforce, citing AI iteration as the reason. Gemini and Crypto.com also laid off 30% and 12% of their staff respectively, all citing AI as their reason. It seems that overnight, AI has become a powerful tool, used by anyone to cut into human resources costs. In fact, this is Coinbase's third large-scale layoff in four years. In June 2022, when Bitcoin fell below $22,000, Coinbase laid off 18% of its workforce, approximately 1,100 people. The reason given was "the market is entering a recession, and cryptocurrencies may face a long winter"; in January 2023, with the aftermath of the FTX crash still lingering, Coinbase laid off another 20%, approximately 950 people. The reason given was "further cost reduction to cope with the survival crisis." It's not hard to see that the reasons for the previous two layoffs were highly consistent, both being a passive response to the market downturn. This time, however, market pressure is only one factor; more importantly, Armstrong characterized this layoff as a "turning point" in resetting the company's operating model in the age of artificial intelligence. In his open letter, he stated that the future company structure will reduce management levels below the CEO and COO, implement a "player-coach" model, and even explore the possibility of "one-person teams." Furthermore, according to Bitcoin Magazine, Armstrong revealed that engineers who refused to use AI tools such as GitHub Copilot and Cursor have been laid off, and a goal has been set for 50% of Coinbase's code to be written by AI. On the surface, this statement seems coherent and consistent, aligning with current technological trends and even interpretable as an ambitious "self-revolution." However, a detail from the capital market may reveal a more genuine motive. After the layoff announcement, Coinbase's stock price rose by approximately 4%. Wall Street's enthusiasm wasn't because people genuinely believed AI could immediately transform Coinbase, but rather because, compared to simply attributing the layoffs to market conditions, using AI as a proactive narrative of "reducing personnel costs" was a smarter path to improving financial statement expectations in a bear market. In fact, Coinbase does face real financial pressure. According to its financial report released in February, Coinbase's net revenue in the fourth quarter of last year fell 21.5% year-on-year to $1.78 billion, and its net loss reached a staggering $667 million, ending eight consecutive quarters of profitability. Considering that Coinbase plans to officially release its first-quarter financial report on May 7 after the US stock market closes, attributing the "urgency" of these layoffs to AI seems like a clever narrative packaging—merging short-term pressure with long-term technological trends, both aligning with AI, the hottest topic in the tech industry, and providing a more respectable explanation for the layoffs than "performance decline." Coinbase's layoffs are not an isolated case. Looking at the entire Web3 industry, the spring of 2026 resembles a collective "cutting off an arm to survive." First, let's look at the spread of the layoff wave. As mentioned earlier, Block, Gemini, and Crypto.com all cited AI as a major reason for layoffs. Secondly, there are also numerous cases of layoffs simply due to market pressure or strategic transformation. Bitcoin mining company MARA laid off about 15% of its staff, transitioning to energy and digital infrastructure; the Algorand Foundation laid off 25%, citing "coping with the uncertain global macroeconomic environment and the overall downturn in the crypto market"; Story Protocol developer PIP Labs laid off about 10%, shifting towards AI intellectual property infrastructure; OP Labs CEO Jing Wang stated that 20 people would be laid off to streamline operations, accelerate decision-making, and reduce coordination costs. Regarding the wave of layoffs citing "AI," there are also differing opinions within the industry. Binance co-CEO He Yi stated at the 2026 Hong Kong Web3 Carnival that Binance will not reduce costs and increase efficiency through layoffs like most tech companies. Instead, it will leverage AI to improve organizational output and innovation capabilities, aiming to grow from 300 million users to 3 billion. Changpeng Zhao, commenting on Block.com's layoffs, bluntly stated: "You must learn to maximize the use of AI, otherwise you will be laid off." Furthermore, after crypto research firm Messari announced its transformation to "AI-first" and laid off its research team, its research analyst Sam bluntly stated: "I can confidently say that high-quality thought leadership is currently the most undervalued resource in the cryptocurrency space. The mediocrity of AI-driven writing and reasoning has led many to believe that it can replace research analysts. I assure you—it cannot." While layoffs at least indicate that a company is still operating, "shutting down" is a far more brutal reality. According to incomplete statistics, in the first quarter of 2026 alone, more than 20 Web3 projects that had received funding announced their shutdown or indefinite cessation of operations. Among them, Leap Wallet, once one of the most mainstream super wallets in the Cosmos ecosystem, will be completely shut down on May 28; Tally, a DAO governance platform that served multiple large governance organizations such as Uniswap, Arbitrum, and ENS, announced its cessation of operations in March; Magic Eden Wallet, a multi-chain wallet under a leading NFT market, ceased operations on May 1 to focus on the Solana ecosystem; and Dmail Network, a well-known Web3 privacy email system, announced the phased shutdown of all its operations starting May 15 due to financing difficulties and user retention challenges. This "death list" spans various sectors, collectively outlining the harsh reality of the Web3 industry in the first quarter of this year. In this environment, whether AI is the real reason for layoffs or a fig leaf for failure and downsizing, each company may have its own answer. Looking back, Coinbase's round of layoffs is merely a microcosm of the Web3 winter of 2026. The phenomenon of packaging layoffs, which are actually due to poor management and a cooling market, as an inevitable result of technological progress has been given an ironic term in the industry: AI-washing. OpenAI CEO Sam Altman bluntly stated, "I don't know the exact percentage, but some people blame artificial intelligence for layoffs when they would have already done so anyway." Marc Andreessen, founder of a16z, described AI as a "silver-bullet excuse" for executives, arguing that many executives use AI as a pretext because it sounds much more "sexy" and is more readily accepted by Wall Street than admitting "management strategic errors" or "stagnant business growth." As one of the biggest beneficiaries of the AI wave, Jensen Huang has repeatedly reiterated that using AI to reduce staff is an evasion of corporate responsibility; truly excellent CEOs should use AI to develop new businesses, not just to eliminate existing employees. Perhaps some companies are indeed moving towards AI, but the prevalence of AI-washing may also stem from a kind of industry infighting. Admitting "business failure" is tantamount to declaring death, while announcing a "transformation to AI" is like planting a new flag. As more and more companies use AI to justify layoffs, we might ask: would these layoffs still happen without AI? The answer is most likely yes. Web3 is undergoing an unprecedented and brutal shakeout. Behind each name on that long "death list" lies a depletion of liquidity, cognitive overload, and years of erosion from a bear market. They died from funding shortages, from user exodus, but not from being "not AI-sufficient."
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