USDC Issuer Circle Quietly Cuts 5% of Staff in Profitable Quarter

Circle, the company behind the USDC stablecoin, has cut about 5% of its workforce, according to its third-quarter earnings release on Wednesday.

The reduction was "designed to better align our organizational structure with our operating model and strategic priorities," the company said in footnotes to its financial tables. Circle did not say how many employees were affected or which teams were cut.

It recorded $9.1 million in restructuring expenses in the quarter, mostly cash payments for notice periods and severance, employee benefits and related costs. Those were partly offset by a $5.7 million reversal of stock-based compensation, as unvested shares held by departing employees were forfeited.

The cuts came in a profitable quarter. Circle reported net income from continuing operations of $226 million, up 5% from a year earlier, on total revenue and reserve income of $865 million, up 17%. Adjusted EBITDA jumped 85% year-on-year to $317 million.

Much of that growth came from outside Circle's core business. Other revenue rose to $207 million, including $182 million from the presale of ARC, the token for its Arc blockchain. Reserve income, the interest Circle earns on the assets backing USDC and its largest source of revenue, fell 8% to $658 million as interest rates on those reserves declined.

The average amount of USDC in circulation rose 8% from a year earlier to $73.3 billion, but ended the quarter flat at $73.9 billion. USDC's share of the U.S. dollar stablecoin market slipped to 27%, according to the company.

CEO Jeremy Allaire did not mention the job cuts in his comments on the results, or in a tweet on Wednesday calling Q3 "a big quarter for Circle." He said USDC carried 79% of all stablecoin transaction volume, up from 66% a year earlier, and that Circle's payments network ended the quarter at $41 billion in annualized volume, up 15-fold. "In January, the GENIUS Act takes effect and regulated digital dollars go mainstream," Allaire wrote. "Every layer of our platform is live and ready for it."

The cuts come as Circle expands. In September, it launched the public mainnet of its Arc blockchain, with BlackRock, DTCC and Visa among its permissioned validators. Allaire said in October that Circle plans to enter about 40 emerging and developing markets, and the company has since teamed up with payments-technology firm ACI Worldwide to pilot USDC settlement on Colombia's instant-payments network.

Circle is the latest in a string of crypto companies to cut staff this year, citing weaker markets, artificial intelligence or both.

Coinbase cut 14% of its workforce in May, with CEO Brian Armstrong pointing to the crypto downturn and the company's adoption of AI. The Ethereum Foundation cut 20% of its staff in June as part of a reorganization, while custody firm BitGo cut 15% that month to focus on AI and stablecoins.