Prediction markets now say that 2026 will be the worst year for tech job cuts on record
The layoffs keep coming, and this time, the numbers suggest they won't stop.
Coinbase CEO Brian Armstrong announced Tuesday that the company would cut roughly 14% of its global workforce, or approximately 700 employees, citing two forces arriving simultaneously: a downturn in the crypto market and artificial intelligence fundamentally changing how the company operates. The announcement was the latest in a wave of AI-attributed workforce reductions that prediction markets now believe will define 2026 as the most significant year for tech job cuts in recent memory.
Read more: Atlassian's AI job cuts spark warnings of a 'chaos tsunami' for the workforce
Traders on Kalshi give 92% odds that total tech layoffs in 2026 will exceed the 447,000 information sector job losses recorded in all of 2025. Polymarket traders put that probability at 87%. The Bureau of Labor Statistics has already reported 178,000 layoffs in the information sector through March alone — and the year is less than halfway through. Total employment in the sector has fallen from a post-pandemic peak of more than 3.1 million to just under 2.8 million as of March.
That trajectory is no longer a distant concern. It’s a planning reality.
Rebuilding from the inside out
Armstrong's memo to employees — shared publicly on X — made clear that Coinbase is not simply trimming costs. It is redesigning how work gets done.
"The pace of what's possible with a small, focused team has changed dramatically, and it's accelerating every day," Armstrong 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."
In practice, that means eliminating what Armstrong calls "pure managers" and replacing the traditional management layer with "player-coaches" — leaders who both oversee their teams and contribute directly as individual contributors. The company is also building what it describes as "AI-native pods": small units, some potentially staffed by a single person, that deploy AI tools across engineering, design, product management, compliance monitoring, and customer support functions. Each manager in the new structure will oversee 15 or more direct reports.
The restructuring will be complete in the second quarter of 2026, Coinbase said in an SEC filing, with the company expecting to incur between $50 million and $60 million in restructuring charges — almost entirely cash costs tied to severance and termination benefits. US employees affected will receive at least 16 weeks of base pay, plus two weeks for every year of service.
Clear Street analyst Owen Lau told CNBC the move was a signal to investors that Coinbase is managing its cost base through the crypto bear market, with first-quarter results expected to be weak. Bitcoin is down 6% for the year. Coinbase's stock has lost 12% in the same period, though it is still outperforming exchange rivals Robinhood and Gemini.
A pattern that can no longer be treated as sector-specific
Coinbase is far from alone. In February, Block cited AI as the primary rationale for laying off nearly half of its workforce, describing the move as an opportunity to operate with "smaller, highly talented teams using AI to automate more work." In April, Meta cut 10% of its workforce — around 8,000 employees — as it accelerated AI investment. Amazon eliminated 16,000 corporate roles in January as part of what it framed as an anti-bureaucracy drive. Gemini, Pinterest, CrowdStrike and Chegg have all announced reductions attributing workforce changes to AI.
Read more: Meta to cut 10% of its workforce as Zuckerberg redirects billions toward AI
The pattern has not gone unexamined. OpenAI CEO Sam Altman said earlier this year that while AI is genuinely reducing demand for some roles, companies are also using it as a convenient explanation for cuts that would have happened anyway. That skepticism is reflected in HRD America's recent reporting on the new layoff era, which found that most organizations are making workforce decisions based on anticipated productivity gains rather than demonstrated ones — and that HR teams are rarely at the table when those decisions are made.
The financial market response has reinforced the behavior. Companies announcing deep cuts tied to AI are increasingly rewarded with rising stock prices, which creates pressure on others to follow suit regardless of operational readiness.
The rehire risk hiding in the data
The data on what typically follows mass AI-attributed layoffs carries a warning that is easy to overlook in the rush to restructure. Research published earlier this year found that more than a third of organizations that conducted AI-led layoffs had already rehired between 25% and 50% of the roles they eliminated — with more than half doing so within six months. Over half of HR leaders surveyed said reskilling and redeployment were never formally discussed before the cuts were made.
Armstrong closed his memo with a warning that extended well beyond Coinbase: "All of this has led us to an inflection point, not just for Coinbase, but for every company."
With prediction markets already pricing in a record-breaking year for tech workforce reductions, that inflection point may be arriving faster than most teams have planned for. The question now is whether people leaders can get ahead of the next wave — or will once again be handed decisions already made.
