Circle’s 5% layoff lands in a $865M quarter as the reserve-yield engine cools 🪙

Circle Internet Group LLC (NYSE:CRCL), the issuer of USDC, reduced its workforce by about 5% while reporting third-quarter revenue and reserve income of $865 million, up 17% year over year. The company recorded $9.1 million in restructuring charges, mostly cash payments for notice periods and severance, employee benefits and related costs. Circle did not disclose the number of employees or teams affected, but said the reduction was “designed to better align our organizational structure with our operating model and strategic priorities.” Net income from continuing operations rose 5% to $226 million, adjusted EBITDA jumped 85% to $317 million and diluted earnings per share increased to $0.84 from $0.64, compared with analysts’ expectations of $0.42.

The headline results received support from businesses outside Circle’s core reserve operation. Other revenue climbed 627% to $207 million, including $182 million from the presale of ARC, the token for the company’s Arc blockchain. Excluding the ARC presale, total revenue and reserve income were $683 million, down roughly 8% year over year, while adjusted EBITDA was approximately $135 million, down 21% from $171 million. Revenue minus distribution costs increased 55% to $453 million, although distribution costs declined to $409.2 million from $447.2 million. Operating expenses rose 16% to $244.9 million, and Circle maintained full-year adjusted expense guidance of $570 million to $585 million, saying the final figure depends on hiring.

Reserve income, generated primarily from interest on the cash and Treasuries backing USDC, fell 8% to $657.6 million as the reserve return rate declined 61 basis points to 3.5%. Average USDC circulation increased 8% year over year to $73.3 billion, but circulation ended September at $73.9 billion, unchanged from a year earlier. USDC’s share of the dollar stablecoin market slipped 1.83 percentage points to 27%. Circle retained its target of 40% yearly USDC growth over several years. The Federal Reserve raised its benchmark range by a quarter percentage point to 3.75%–4% in September, below the 4%–4.25% range set a year earlier, while Circle’s reserve return edged up from 3.48% in the second quarter.

Circle launched Arc’s public mainnet on Sept. 16, 2026, with 11 founding validators, including BlackRock, DTCC and Visa, and more than 100 institutions and apps. CEO Jeremy Allaire said USDC carried 79% of all stablecoin transaction volume, up from 66% a year earlier, while onchain USDC transaction volume increased 49% to $13.9 trillion. A record $208B of USDC was minted and redeemed, about $2.3B every day. CPN annualized total payment volume grew 15.2x year over year, with 205 financial institutions enrolled, and Circle’s payments network ended the quarter at $41 billion in annualized volume, up 15-fold. Circle also agreed to acquire payments firm Tazapay and partnered with ACI Worldwide to pilot USDC settlement on Colombia’s instant-payments network.

The reduction followed a previous trim in December 2024, when Circle cut “less than 6%” of its jobs. Its filing did not mention artificial intelligence (AI), although Allaire said in May that 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,” he said. Allaire did not mention the layoffs in his Q3 comments or in a Wednesday post describing Q3 as “a big quarter for Circle.” He added: “In January, the GENIUS Act takes effect and regulated digital dollars go mainstream.” Circle also plans to enter about 40 emerging and developing markets, while ARC is intended to support network security and governance as Arc moves toward proof of stake in 2027.