Andrew Grass helped hire about 200 people at Coinbase Global Inc. earlier this year. Now most of those hires — and MrGrass himself — are gone.
In a process that several former employees described as impersonal and shocking, the largest US digital-asset trading platform on Tuesday cut about 18% of its workforce, or roughly 1,100 jobs, citing the plunge in cryptocurrencies and worsening economic conditions.
Chief Executive Officer Brian Armstrong revealed the news to affected employees through an email, but some said they didn’t receive it and found out about the layoffs via social media instead. Others said their first hint that something was wrong came when they were unable to log onto their work laptops.
Mr Grass was caught off guard by the announcement since he had recently returned from an off-site meeting with some of the company’s associate managers in Austin, Texas. When he woke up Tuesday, a colleague sent a group text urging everyone to check their email for information about the layoffs. He tried to get into his computer, but couldn’t log on. It was a startling end to his stint at the company, particularly after he had spent recent weeks looking to boost hiring.
“In a four-week span of time, I spent 80 of those hours doing interviews and follow-up interviews,” said Mr Grass, 43, who was an associate manager of Coinbase’s customer experience team. “This was a lot of time and effort and now all these people are gone.”
The layoffs are part of a rapid shift in the crypto industry, with companies flipping from expansion to contraction in a matter of days as Bitcoin continues its dramatic slump toward $20,000. Until very recently, Coinbase was on a hiring binge, with its full-time staff ballooning by about 1,200 employees this year alone even as shares tumbled to a fraction of their 2021 initial public offering price. Things started to sour a couple of weeks ago when hundreds of hires had their offers rescinded.
Coinbase didn’t provide further comment, pointing to previous statements made by executives.
“I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you,” Mr Armstrong said in a post on the company’s blog Tuesday. “Given the number of employees who have access to sensitive customer information, it was unfortunately the only practical choice, to ensure not even a single person made a rash decision that harmed the business or themselves.”
Didn’t See it Coming
Uneeb Agha, a 32-year-old in San Francisco, woke up at 7:30 a.m. on Tuesday morning. The first thing he saw was a text from his mom asking if everything was OK. Agha wasn’t sure what she was talking about so he proceeded with his normal morning routine, firing up his work’s Slack channel. It wasn’t working. Neither was his Coinbase email or his work laptop.
He looked at his personal email account and didn’t see any messages from the company. But he found a meeting invitation from his manager that had been scheduled for 6:30 a.m. local time, which Agha had not been awake for.
Mr Agha, who had worked at Coinbase for two and a half years — first as a software engineer and most recently developing products — went to LinkedIn to figure out what was going on. Eventually, he received an email explaining the transition process and was told a system fault meant some of the affected employees never received the initial email.
He hadn’t seen the layoffs coming.
“They gave us so much reassurance saying that the company was in a pretty good shape,” Agha said. “You have people saying that everything is OK and the next thing you know, it’s not OK.”
Coinbase reported lower-than-expected quarterly revenue in May, and warned that trading volume would fall in the second quarter compared to the first. The company had sought to present an optimistic outlook through the market downturn, even as its shares slumped. In response to growing fears about the safety of customers’ assets, Armstrong said last month there was “no risk of bankruptcy,” even in a “black swan” event.
Most of Coinbase’s employees worked remotely, pointing to a new challenge for HR managers in an era when it’s increasingly common for newer hires to never step foot in an office. Layoffs have been rare since the economy rebounded from the early pandemic lockdowns, but that’s starting to shift in some industries like crypto and technology.
“There have been very few places that have been laying people off, so we’re seeing companies try to figure out how to do it,” said Peter Cappelli, professor of management at the Wharton School at the University of Pennsylvania. “With remote work, practices that were in place for in-person work might not function well in this new context.”
Timothy Chang, a 23-year-old who recently graduated from Drexel University in Philadelphia, had been working with Coinbase as a software engineer for about three months when he was laid off. The first clue that tough times were approaching was when he heard the company had rescinded offers to prospective employees.
“I just didn’t expect it to happen so soon, or for it to hit engineering,” a department core to the company, he said.
As a young professional, working for Coinbase felt like a great first career move even if it was riskier than other industries, he said. News of the layoffs has already triggered interest from other companies looking to hire, and he has several interviews lined up for next week.
“In situations like these when the crypto market is down, it really affects the companies that are involved,” Mr Chang said. “But at the same time, I truly believe in what we’re building and what all the other people who have entered the Web3 and crypto space are doing.”