Circle Cut 5% of Staff in a Quarter When Profit Rose to $226 Million

Circle Internet Group cut about 5% of its workforce in the third quarter, a move disclosed in a footnote to earnings showing net income from continuing operations up 5% at $226 million. The layoffs cost $9.1 million, mostly severance and notice pay, and they arrive as the New York-based issuer of the USDC stablecoin (a digital token pegged to the dollar) watches its core revenue line shrink.

The contrast is the story. Total revenue and reserve income climbed 17% to $865 million, but a one-off did much of the lifting: Circle booked $182 million from a presale of ARC, the token for its Arc blockchain, which launched September 16.

What Do the Layoffs Say About Circle's Real Revenue?

Strip out the ARC presale and other non-interest income, and the picture darkens. Reserve income — the interest Circle earns on cash and Treasuries backing USDC — fell to roughly $658 million from about $711 million a year earlier, according to the company's filing.

The cause is mechanical, not mysterious. The rate Circle earns on its reserves dropped to 3.5%, down 0.61 percentage points. Every Federal Reserve rate cut lowers the yield on the Treasuries sitting behind USDC. That matters enormously for shareholders, because about three-quarters of Circle's revenue comes from reserve interest.

The takeaway: a rate-cut cycle directly compresses Circle's margins, and headcount is one of the levers management can pull fastest.

Why Cut Jobs While Profit Grew?

Circle tied the reduction to "matching its structure with its strategy and operating model," per the filing. That's standard corporate language, but the numbers behind it are concrete.

Operating expenses rose 16% to $244.9 million in the quarter. Management held its full-year adjusted expense guidance of $570 million to $585 million, and said the final figure depends on hiring decisions.

This is not Circle's first trim. The company cut "less than 6%" of jobs in December 2024.

The filing itself never mentions artificial intelligence. Context does the work instead. In May, CEO Jeremy Allaire said 85% of Circle staff used AI tools weekly.

"I think we're very early in the impact of AI agents on the conduct of work and how that plays out through labor," Allaire said.

Can USDC Growth Cover Rising Costs?

USDC in circulation ended September at $73.9 billion — flat from a year earlier. Circle's share of the dollar stablecoin market slipped 1.83 percentage points to 27%.

One cost line moved the right way. Distribution costs — the interest Circle passes to partners that distribute USDC — fell to $409.2 million from $447.2 million.

Despite flat circulation, Circle still guides for 40% yearly USDC growth over several years, a target it left unchanged.

What Is Circle Betting On Beyond Interest Income?

The company is pushing newer revenue lines hard. Its payments network reached $41.3 billion in annualized volume, and Circle agreed to buy payments firm Tazapay.

For crypto-sector workers, the timing matters. These results landed in a week of crypto earnings from Block, Circle and Riot Platforms — a cluster that will shape hiring and layoff expectations across digital-asset firms through the rest of the year.

Circle's bet, spelled out in its own numbers, is that payments and blockchain infrastructure revenue can outrun a declining interest-rate tailwind before flat USDC circulation catches up with its expense base.