Circle Reduces Workforce by 5% Amid Rising Revenue and Strategic Realignment

Circle Internet Group has cut approximately 5% of its workforce in the third quarter, a move disclosed in the footnotes of its earnings report. This decision comes as the issuer of the USDC stablecoin reported a 17% increase in revenue, reaching $865 million, and a 5% rise in net income to $226 million.

The company incurred a restructuring charge of $9.1 million related to the layoffs, which it described as necessary to align its organizational structure with its operational model and strategic priorities. However, details regarding the number of affected employees or specific teams were not provided, and the layoffs were not highlighted in the earnings release.

Despite the headline growth, Circle's core business showed signs of strain. Reserve income, which is the interest earned on Treasuries and cash backing USDC, fell by 8% year-over-year to $658 million, as the reserve return rate decreased by 61 basis points to 3.5%. Additionally, while the average USDC in circulation grew by 8% to $73.3 billion, circulation at the end of the quarter remained flat year-over-year at $73.9 billion. Circle's market share in the fiat-backed stablecoin sector also declined to 27%.

A significant portion of the revenue increase was attributed to a one-time item: a private presale of the ARC token for Circle's new Arc blockchain, which contributed $182 million to the total revenue. Excluding this presale, overall revenue would have seen a decline. Adjusted EBITDA rose to $317 million, an 85% increase, also influenced by the presale.

On the cost side, Circle's operating expenses increased by 16% to $245 million due to higher spending in various areas, while distribution costs fell by 8% to $409 million. The workforce reduction aligns with Circle's ongoing efforts to build its Arc blockchain and integrate recent acquisitions, including a planned purchase of Tazapay, a Singapore-based cross-border payments platform.

Circle's public mainnet for Arc launched on September 16, with over 100 institutional builders participating. The company minted the full 10 billion ARC supply, marking it as the first public company to issue a network token for its own layer-one chain. Additionally, Binance invested $100 million into Circle equity shortly before a major hack incident.

Looking ahead, the GENIUS Act will take effect on January 18, introducing federal licensing and reserve rules for stablecoin issuers, which Circle has stated its stablecoins will comply with. The future remains uncertain as the company navigates a reduced workforce and a one-time token sale amid declining core revenue.