Circle reduces workforce by 5% even as third-quarter profit climbs

Circle Internet Group, the firm operating the USDC stablecoin, let go of around 5% of its employees during the third quarter. The layoffs were revealed in a small footnote within a set of earnings reports that indicated net income was increasing.

The headcount reduction incurred $9.1 million, largely in severance and pay in lieu of notice. These staff reductions come at a time when Circle's primary revenue stream — interest from the cash and Treasury securities underpinning USDC — is declining. Around three-quarters of the revenue generated for holders of CRCL stock comes from that interest.

What Prompted Circle’s Job Cuts During a Period of Profit Growth?

According to its filing, Circle linked the job cuts to aligning its organizational structure with its strategy and operational framework.

At first glance, the aggregate figures are robust. Net income from ongoing activities increased by 5%, reaching $226 million. Total revenue and reserve income surged 17% to $865 million.

A non-recurring event was responsible for a large portion of the growth. Circle recorded $182 million from an advance sale of ARC tokens for its Arc blockchain platform, which went live on September 16.

Excluding that presale and other non-interest earnings, reserve income dropped to roughly $658 million from about $711 million in the prior year, per the filing.

Circle noted several milestones for the period. These included the Arc mainnet launch with 11 founding validators and over 100 applications. The CPN network saw annualized transaction volume rise 15.2 times compared to the previous year, with 205 financial institutions participating. The company also disclosed a planned acquisition.

The yield Circle earns on its reserves fell to 3.5%, a decline of 0.61 percentage points. Reductions to the Federal Reserve's interest rate narrow the return on the Treasury securities serving as backing for USDC.

Is USDC’s Expansion Sufficient to Offset Circle’s Growing Expenses?

The volume of USDC in circulation stood at $73.9 billion at the close of September, unchanged year-over-year. The stablecoin's share of the dollar-pegged stablecoin market fell by 1.83 percentage points to 27%.

Operating costs increased 16% over the same period, reaching $244.9 million. Circle maintained its forecast for full-year adjusted expenses between $570 million and $585 million, noting that the precise outcome hinges on staffing decisions.

This latest workforce reduction follows a previous one. Circle eliminated "less than 6%" of its positions in December 2024.

The regulatory filing makes no reference to artificial intelligence. However, back in May, CEO Jeremy Allaire stated that 85% of Circle employees were weekly users of AI tools.

“I think we’re very early in the impact of AI agents on the conduct of work and how that plays out through labor.”

The interest Circle shares with its distribution partners, classified as distribution costs, decreased to $409.2 million from $447.2 million.

What Revenue Streams Is Circle Pursuing Besides Interest?

The firm is developing new revenue categories. Its payments network reached $41.3 billion in annualized transaction volume, and it struck a deal to acquire the payments company Tazapay.

The quarterly figures were disclosed in a week that also featured earnings reports from Block and Riot Platforms. Circle continues to project an annual USDC growth rate of 40% over the coming years, a target it has kept in place even though circulation has not expanded.