It’s rare that a major life event occurs during a Taco Bell drive.
But for Conner Hein, it was a particularly bleak dinner. The University of Michigan graduate is preparing to start her first job, at Coinbase—Cryptocurrency trading platform run by a billionaires are not funny—When an email arrived in his inbox last week, this accomplished everything.
“We have made the very difficult decision to rescind your offer of employment,” reads the letter obtained by The Daily Beast from another source. “As such, you will no longer start with us on your previously agreed start date.”
Faced with a devastating crypto market crash, Coinbase has decided to withdraw its score of job offers and extend the hiring freeze announced in mid-May.
“I thought, ‘Well, my day is 10 times worse,’” Hein told The Daily Beast. “And then I sadly ate like six burritos.” (The 22-year-old Michigan man said he held no ill will toward Coinbase’s “great” employees.)
Following the severe collapse in the price of Bitcoin and other cryptocurrencies this March and amid fears of an upcoming recession, many crypto companies are making some painful cuts. . Gemini, the cryptocurrency exchange started by the famous Winklevoss twins on Facebook, lay off 10% of its workforce last week, the same day as Middle Eastern exchange Rain Financial, recruited dozens of employees.
But some crashes are as dramatic as Coinbase, which told more than 300 recruits last week that they wouldn’t get the jobs they were promised, according to a “talent hub” created by the company to help. The old tenants landed new gigs. Many candidates have left jobs at leading banks and technology companies; others are foreign students dependent on work for their visas.
Even worse, three former recruits told The Daily Beast that the company had sent a letter just a week earlier promising them their jobs were guaranteed.
One person being turned down for a new hire called the sudden reversal “well off,” adding that it likely indicated a “catastrophic lack of planning” on the part of the management team.
In a public statement, Coinbase said it “did not take this decision lightly,” but called the move a “prudence given market conditions.”
“Two weeks ago, we paused hiring while we took time to realign our hiring needs against our highest-priority business goals,” said Human Resources Director LJ Brock writes in a blog post on the day the cuts were announced, adding that the company would offer a “generous” severance package and career support to affected recruits.
“As these discussions evolve, it becomes clear that we need to take more stringent measures to slow our headcount growth,” Brock writes. “Adapting quickly and acting now will help us successfully navigate this macro environment and thrive even more, enabling even more innovation and healthy growth.”
But a former recruiter for the company told The Daily Beast that he was concerned about the company’s rapid hiring pace long before the market crashed, calling its hiring goals “too much”. rampage”.
The employer, who asked to remain anonymous for fear of professional influence, said the company was tripling its headcount every year – a breakneck pace he had never seen at another startup. (The company announced in first quarter earnings report that it has grown by 33% this year.) The rapid growth has led to “a lot of rifts” in the teams he’s recruiting, the former employee said, adding that the environment here is “quite”. cute.”
“It makes sense, the short-term demise of the company, because I think they’ve gone a bit too far,” he added. “We were a little bit crazy.”
Cryptocurrency is a particularly volatile emerging market, and Coinbase isn’t the only crypto company to make painful sacrifices this month. Buenbit, an Argentina-based cryptocurrency exchange, recently laid off 45% of its staff, while Latin American exchanges Bitso and Mercado each laid off more than 80 employees.
And last week, blockchain startup Wyre laid off more than a dozen employees – according to one affected by the cuts – just a month after it was announced that it would be acquired by the processing startup. pay Flash for $1.5 billion. “I just thought it was short-sighted and stupid,” the former employee said.
Another worker told The Daily Beast that Wyre hired people “like crazy” until “like one day they decided to fire those people.” The worker was rattled that he received only a few weeks of severance, much less than those employed by Coinbase.
“It seems a bit unfair… Here I am, squashed for months, working overtime like hell, and [was] promised a lot of things,” he said.
In an email, Wyre cofounder and CEO Ioannis Giannaros said that employees are paid severance based on tenure. He added that the company has hired quickly to accommodate the significant increase in annual revenue but has recently begun to scale back.
Other tech companies like Twitter and Meta have also cut back in the face of a bear market, with Twitter also cancel some job offers last month. But the demise of cryptocurrency exchanges is particularly notable due to their phenomenally successful operations in recent years. The crypto market has added around $1.5 trillion in value by 2021 and attracted over $33 billion in venture capital. Coinbase alone generated $3.6 billion in revenue last year — up 11% year-over-year — and became the first crypto company to make the Fortune 500 list.
However, in May, amid the market decline and the collapse of the so-called “stable coin,“The crypto market has plummeted dramatically, wiping out over $300 billion in just one day. The price of Bitcoin – the oldest and most valuable coin – fell below $27,000 for the first time in over a year, before leveling out at around $30,000.
Shares of Coinbase, which cuts all transactions on its platform, have plunged along with the currencies, down 80% since November. The company also reported a 1.17 billion drop in revenue. dollars for the three months before March 31 — 35% off.
Several former Coinbase employees said the startup should prepare for this kind of collapse, given the volatility of the crypto market.
One former employee told The Daily Beast: “The problem with Coinbase is the failure or success of the company that perfectly tracks whether it is a bull market or a price. “This will always happen.”
She added: “I think anyone who doesn’t see this coming is fooling themselves.”
Current employees flock to anonymous comments on the social media platform Blind, which verifies that users work at the companies they post to but otherwise keeps their identities private. .
“Morality is in the toilet. About half of employees are likely to voluntarily offer layoffs at this point,” one employee wrote. Another lamented that the company’s management had “adjusted their cost estimates” for new hires, although users argued that those who were fired were properly taken care of. .
Burned by their recruiting experience, some will be Coinbase employees planning to stay as far away from the industry as possible. Ashutosh Ukey was one of the remaining hires looking for a new company to fund his visa when Coinbase pulled out of the program. He told The Daily Beast that he had “lost a bit… just until there was less on the personal line for me.”
But others have maintained their allegiance to cryptocurrencies, where the most fervent devotees have an almost religious belief in the technology.
“We go through the same cycle every few years,” said one Wyre worker who was laid off. “Perhaps this is the end, and I guess I’ll be the one with the egg on my face… but I expect to see this change just like everyone else.”