Artificial intelligence is just one piece of the reasoning behind the layoffs, America’s largest cryptocurrency exchange said Tuesday (May 5). Another factor is the volatility of the crypto market, CEO Brian Armstrong wrote on the Coinbase blog.

“Crypto is also on the verge of the next wave of adoption, with stablecoins, prediction markets, tokenization, and more taking off,” the post said.

“However, our business is still volatile from quarter to quarter. While we’ve managed through that cyclicality many times before and come out stronger on the other side, we’re currently in a down market and need to adjust our cost structure now so that we emerge from this period leaner, faster, and more efficient for our next phase of growth.”

Armstrong said artificial intelligence is transforming the way the company works, shortening timelines, automating workloads and letting smaller teams do the work of larger ones.

“All of this has led us to an inflection point, not just for Coinbase, but for every company. The biggest risk now is not taking action,” the CEO wrote. “We are adjusting early and deliberately to rebuild Coinbase to be lean, fast, and AI-native. We need to return to the speed and focus of our startup founding, with AI at our core.”

Beyond cutting costs, Armstrong said the company is “rebuilding Coinbase as an intelligence,” with plans to flatten its structure to include no more than five layers below the CEO/COO.

Armstrong said Coinbase will also begin “concentrating around AI-native talent,” while experimenting with reduced pod sizes, including “one person teams” where a single person serves as engineer, designer and product manager.

Coinbase isn’t the only company in the FinTech space that sees AI reducing headcount. Following sweeping layoffs at his company earlier this year, Block founder and CEO Jack Dorsey argued in a blog post with Sequoia Capital Partner Roelof Botha that AI could replace the “traditional hierarchy” of management.

“At Block, we’re questioning the underlying assumption: that organizations have to be hierarchically organized with humans as the coordination mechanism. Instead, we intend to replace what the hierarchy does,” Dorsey and Botha wrote.

In the wake of those cuts, PYMNTS argued that Block’s thinking is in line with a larger transition happening at technology and financial services firms.

“As AI systems increasingly draft code, automate internal documentation, analyze risk signals and handle portions of customer support, the amount of human labor required for certain workflows changes,” that report said. “Organizations are reassessing team size relative to output.”