Crypto Fired Its People. Then Blamed the AI.

Kraken, Coinbase, and Block have cut over a thousand jobs this year. Each company points to AI. Not everyone is buying it.

Kraken's parent company, Payward, cut 150 workers this month after deploying AI tools it says boosted efficiency. That's on top of 400 more cut last October when a new co-CEO arrived  over 550 jobs gone in seven months from a company simultaneously spending billions on acquisitions and preparing for an IPO.

Coinbase went bigger. CEO Brian Armstrong told roughly 700 staff  14% of the company  they were out. The vision: replace "pure managers" with "player-coaches," and build AI-native pods where a single person directs agents doing the work of engineers, designers, and product managers combined. "We are not just reducing headcount," Armstrong wrote. "We're fundamentally changing how we operate."

"You write AI skills to replace yourself, then go." — Former Kraken employee

Block, Jack Dorsey's payments firm, announced cuts of nearly half its total workforce, describing the move as a shift to "smaller, highly talented teams using AI to automate more work." Klarna has telegraphed a similar 50% reduction on its path to becoming an "AI-native" company.

Analysts are skeptical the explanation is as clean as it sounds.

Several of these firms lost up to 70% of their market value as investors repriced them from fast-growing tech companies to financial-sector businesses. Interest rates rose, pandemic-era hiring sprees aged badly, and AI may simply be the most flattering label available for cuts that were coming regardless. Industry data puts real near-term AI productivity gains at 10–20%  nowhere near the 2–3x leap needed to justify halving a workforce.

For Kraken specifically, the timing matters. The company is chasing a public listing at a reported $20 billion valuation. A leaner headcount means better margins on the S-1. That's a story Wall Street likes, whatever the underlying cause.

Prediction markets are pricing in more of the same  traders currently put 92% odds on 2026 breaking the all-time annual record for US tech job losses. If they're right, what crypto is doing this spring isn't an outlier. It's the opening act.

‍