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Technology Stocks : Coinbase Global, Inc. (COIN)
COIN 67.31+6.8%Sep 28 4:00 PM EDT

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To: Glenn Petersen who wrote (68)6/5/2022 7:38:24 AM
From: Glenn Petersen   of 74
 
Coinbase Freezes Hiring and Will Rescind Accepted Job Offers

The crypto crash and fears of a Crypto Winter have prompted Coinbase to get even more aggressive in cutting costs.

By Andrew Hayward
Decrypt
Jun 2, 2022
3 min read

In brief

-- Posting a $430M loss in Q1 2022, Coinbase will "take more stringent measures" in hiring.

On the same day that rival crypto exchange Gemini confirmed layoffs, Coinbase announced today that it will continue its hiring freeze amid a tumultuous recent market for both cryptocurrency and tech stocks. Furthermore, the firm will rescind some job offers for employees who had accepted positions but had not yet started working.

Coinbase first announced plans in May to slow hiring, but today’s blog post from L.J. Brock, Coinbase’s chief people officer, confirms that the company will take a more severe turn.

“As these discussions have evolved, it’s become evident that we need to take more stringent measures to slow our headcount growth,” Brock wrote. “Adapting quickly and acting now will help us to successfully navigate this macro environment and emerge even stronger, enabling further healthy growth and innovation.”

According to Brock, the freeze will include not only new, unfilled positions, but also backfilling existing empty roles in the company. There’s an exception for “roles that are necessary to meet the high standards we set for security and compliance, or to support other mission-critical work.”

Furthermore, Coinbase will pull some accepted offers for incoming employees who have yet to start.

Brock wrote that it is “not a decision we make lightly,” but that Coinbase sees it as “necessary to ensure we are only growing in the highest-priority areas.” The firm said that there will be limited exceptions and that all affected people will be notified today.

Brock added that the move is “not a reflection on the highly talented people we had extended job offers to,” and that the firm will offer severance to those with rescinded offers as well as help them find jobs elsewhere in the industry.

The announcement comes less than a month after Brock had promoted the fact that Coinbase was hirig.n

In May, Coinbase posted a $430 million loss for Q1 2022 after missing analysts’ predictions on both profit and revenue for the quarter. Coinbase’s stock price is down more than 40% over the last month alone at a current price of under $74 per share.

“We always knew crypto would be volatile, but that volatility alongside larger economic factors may test the company, and us personally, in new ways,” Brock wrote today. “If we’re flexible and resilient, and remain focused on the long term, Coinbase will come out stronger on the other side.”

As mentioned, Gemini announced this morning that it will lay off 10% of its staff to prepare for a “crypto winter” ahead. In late April, crypto and stock trading app Robinhood laid off 9% of its staff as growth slowed. Crypto markets have seen extreme volatility in recent weeks, with the price of top crypto Bitcoin down 21% over the past 30 days.

Coinbase Freezes Hiring and Will Rescind Accepted Job Offers - Decrypt

Crypto Winter Layoffs Hit Hard—But Won’t Kill the Industry

Big crypto companies like Coinbase, Gemini, Bitso and more are battening down the hatches. Will they emerge from it leaner and stronger?

By Daniel Roberts
Decrypt
Jun 4, 2022
3 min read

If you don't think we're in Crypto Winter yet, consider these headlines from the week: Gemini laid off 10% of its staff; Coinbase instituted a hiring freeze and rescinded accepted job offers; Mexico's largest crypto exchange Bitso laid off 10% of its staff; and Argentina-based crypto exchange Buenbit laid off 45% of its staff.

The news is bad. And if you're an engineer who got a letter from Coinbase canceling a job offer you already accepted, there's no silver lining here. It's enough to make someone sour on working in the crypto industry at all.

But if you zoom out, there's reason not to panic.

Those calling this period the end of crypto (and there are so many saying it) clearly weren't in this industry in 2018. During that time, in which Bitcoin tanked 70% after peaking at $20,000, I kept hearing the same refrain from crypto execs and entrepreneurs I'd welcome on Yahoo Finance live shows: "We're putting our heads down and building now." It was difficult not to scoff at that talking point back then, because what else could they say? But many of the tools and platforms built during that time became the key success stories of the pandemic-prompted crypto boom in 2020 and 2021. They really did build things.

This is why it's reasonable for Dan Held, a Bitcoin O.G. who sold his price app ZeroBlock to Blockchain.com in 2013 long before he was a Twitter influencer with 600,000 followers, to declare that this Crypto Winter will be milder than past winters.

Held joined me for a chat at CoinMarketCap's virtual conference last week and said people are now going back "from HODL to BUIDL... The original Bitcoin ethos was all about building. Back in the early era, everyone had their own side project because they needed to go build something to make the ecosystem better. ... Now we've got A-players across all of tech wanting to come build things in the crypto ecosystem, we've got VC funds raising tens of billions of dollars in aggregate to go deploy into this ecosystem, so I don't think this winter is going to be as harsh as the other ones."

Another crucial point about this Crypto Winter is that non-crypto tech stocks aren't faring any better right now. Pandemic darlings Peloton (PTON) and Zoom (ZM) are down 60% and 40% this year, respectively. How about those once-hallowed FAANG names? Facebook ( changing its stock ticker to META next week) is down 45% this year, Amazon (AMZN) is down 28%, Apple is down 20%, Netflix (NFLX) is down 68% (goodness gracious), and Alphabet (GOOG) is down 22%.

No matter what, rescinding job offers is a terrible look, and Coinbase's reputation will now take yet another P.R. hit. But companies often have to cut head count during downturns—it's what they do to survive. When other large companies make job cuts (like in March 2020) the media reaction is not to declare their industry dead. But crypto, in the big scheme of things, is still so new (even after 13 years for Bitcoin) that skeptics still insist the entire thing could collapse.

It will not.

Crypto Winter Layoffs Hit Hard—But Won’t Kill the Industry - Decrypt
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