Circle cuts about 5% of staff as Q3 profit rises
Circle cuts about 5% of staff in profitable quarter
Circle, the company behind USDC, cut about 5% of its workforce in the third quarter. USDC is a stablecoin, a crypto token designed to keep its value close to $1.
The company disclosed the cuts in its third-quarter earnings release on Wednesday. The cuts came even though profit rose during the quarter.
Main figures from the quarter
- Workforce cut: about 5%
- Restructuring costs: $9.1 million
- Net income from continuing operations: $226 million, up 5% from a year earlier
- Total revenue and reserve income: $865 million, up 17%
- Adjusted EBITDA: $317 million, up 85% from a year earlier
What Circle said about the cuts
Circle said the move was designed to better align its organization with its operating model and strategic priorities. The company put that explanation in footnotes to its financial tables.
Most of the $9.1 million in restructuring costs were cash payments. They included notice periods, severance, employee benefits and related costs. A $5.7 million reversal of stock-based compensation partly offset the costs. That happened because unvested shares held by departing employees were forfeited.
CEO Jeremy Allaire did not mention the job cuts in his comments on the results. In a post on Wednesday, he called the quarter a big one for Circle.
Details Circle did not provide
Circle did not say how many employees were affected. It also did not say which teams were cut.
That information was not included in the earnings release described in the source.
Growth outside reserve income
Reserve income fell 8% to $658 million. Reserve income is the interest Circle earns on the assets backing USDC. It is also the company's largest source of revenue. The fall came as interest rates on those reserves declined.
Other revenue rose to $207 million. That total included $182 million from the presale of ARC, the token for Circle's Arc blockchain. A blockchain is a shared digital ledger that records transactions.
The average amount of USDC in circulation rose 8% from a year earlier to $73.3 billion. It ended the quarter at $73.9 billion. Circle said USDC's share of the U.S. dollar stablecoin market slipped to 27%.
Allaire said USDC carried 79% of all stablecoin transaction volume, up from 66% a year earlier. He also said Circle's payments network ended the quarter at $41 billion in annualized volume, up 15-fold.
Other crypto firms also cut staff this year
Circle is the latest in a series of crypto companies to cut staff this year. The source cites weaker markets, artificial intelligence, or both as reasons given by firms.
Coinbase cut 14% of its workforce in May. The Ethereum Foundation cut 20% of its staff in June. BitGo cut 15% that month. Luno cut a fifth of its global staff in July. Bitwise cut 14% of its staff in August.
Expansion plans mentioned in the same period
Circle launched the public mainnet of its Arc blockchain in September. BlackRock, DTCC and Visa were among its permissioned validators. A mainnet is the live, public version of a blockchain.
Allaire said in October that Circle plans to enter about 40 emerging and developing markets. The company has since teamed up with ACI Worldwide to pilot USDC settlement on Colombia's instant-payments network.
Allaire also said the GENIUS Act takes effect in January. He said regulated digital dollars will then go mainstream and that every layer of Circle's platform is live and ready.
Where this report comes from
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.