Circle Internet Group, the issuer of the USDC stablecoin, reduced its workforce by roughly 5% during the third quarter, a reduction the company disclosed only in the footnotes of its third-quarter 2026 earnings release. The report showed revenue rising 17% to $865 million and net income up 5% to $226 million.

The company booked a $9.1 million restructuring charge for the cuts, which it described as "designed to better align our organizational structure with our operating model and strategic priorities." The charge covered notice-period pay, severance and benefits. Circle did not say how many employees were affected or which teams were hit, and the layoffs did not appear in the release's list of business highlights.

Shares of CRCL slipped about 1.2% in premarket trading to $74.33 after gaining 4.4% on Tuesday. The stock now trades at a fraction of the highs it reached after its June 2025 IPO.

A Token Sale Carried the Quarter

The headline growth masks a softer core business. Reserve income — the interest Circle earns on the Treasuries and cash backing USDC — fell 8% from a year earlier to $658 million, as the reserve return rate dropped 61 basis points to 3.5%. That line item is the core of the fiat-backed stablecoin business model: issuers earn yield on the reserves backing tokens in circulation rather than charging users to hold them, so this income moves with interest rates.

Average USDC in circulation grew 8% to $73.3 billion, but that was not enough to offset lower yields. Circulation at quarter-end was flat year over year at $73.9 billion, and Circle's share of the fiat-backed stablecoin market slipped to 27%.

What filled the gap was a one-time item. Other revenue jumped to $207 million from $29 million, with $182 million of that coming from the private presale of ARC, the token for Circle's new Arc blockchain. Strip out the presale and total revenue would have declined. Adjusted EBITDA of $317 million, up 85%, carries the same presale benefit.

The cost side tells the rest of the story. Operating expenses rose 16% to $245 million on higher general and administrative, depreciation, IT and marketing spending, while distribution costs — the fees Circle pays partners such as Coinbase to hold USDC — fell 8% to $409 million. Distribution costs remain Circle's single largest expense, well above its operating expenses. The workforce cut lands as the company builds Arc, integrates a January asset acquisition and prepares to absorb Tazapay.

Circle Is Spending on the Next Business

Circle is paying for growth beyond its core product. Arc's public mainnet launched Sept. 16 with more than 100 institutional builders, and Circle minted the full 10 billion ARC supply, becoming the first public company to issue a network token for its own layer-one blockchain.

The company has also agreed to buy Tazapay, a Singapore-based cross-border payments platform with more than $25 billion in annualized volume, in a deal expected to close in 2027.

Binance, days before its $6.34 billion hack, put $100 million into Circle equity and renewed a USDC distribution partnership.

The GENIUS Act takes effect Jan. 18, bringing federal licensing and reserve rules for stablecoin issuers — rules that bear directly on the reserve model behind Circle's core income — a regime the Federal Reserve has begun to fill in. Circle has said its stablecoins will qualify.

Whether a smaller headcount and a one-time token windfall can bridge the gap until rates stop falling is the question the quarter leaves open.

This post Circle (CRCL) Cuts About 5% of Workforce as Q3 Revenue Hits $865M first appeared on Bitcoin Magazine and is written by Micah Zimmerman.