Coinbase chief Brian Armstrong admitted that the company overhired and “grew too quickly” as he broke the news to 1,100 workers that they’d be fired.
In a letter to all Coinbase staff on Tuesday, Armstrong announced that the company’s workforce would be slashed by 18%, blaming the need for such drastic measures on a possible looming recession, the need to manage costs, and the desire to increase efficiency.
But Armstrong also detailed the company’s own failings with regard to its hiring policy, specifically the decision to swell its ranks by around 200% a year starting in 2021.
“At the beginning of 2021, we had 1,250 employees,” wrote Armstrong. “At the time, we were in the early innings of the bull run and adoption of crypto products was exploding. There were new use cases enabled by crypto getting traction practically every week.”
“We saw the opportunities but we needed to massively scale our team to be positioned to compete in a broad array of bets. It’s challenging to grow at just the right pace given the scale of our growth. While we tried our best to get this just right, in this case it is now clear to me that we over-hired.”
Armstrong, for what it’s worth, said that he bore full responsibility for the disaster and outlined a package designed to help affected employees, comprising:
- At least 14 weeks of severance pay, boosted by an extra two weeks for every year of employment.
- Four months of health insurance for US workers and four months of mental health support for international employees.
- Access to Coinbase’s Talent Hub team, which will work with fired employees to find them jobs with other firms.
According to an SEC filing, the cuts will leave Coinbase with approximately 5,000 remaining staff and will cost the company somewhere in the region of $40 million in related expenses — almost all of which will make up termination packages.
Fired Coinbase workers forced to wait to discover their fate
Employees across the firm were left sweating for an hour after receiving Armstrong’s devastating news.
“In the next hour every employee will receive an email from HR informing if you are affected or unaffected by this layoff,” read the note.
“Every affected employee will receive an invitation to have a direct conversation with your HRBP and the senior leader of your organization.”
However, it appears that eager employees could also discover their fates by simply checking to see if their company email had been locked. Armstrong explained that the confirmations would be sent to fired workers via their personal emails due to the company protecting itself against disgruntled (soon-to-be) ex-employees who might try to access and misuse sensitive company data.
“I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you,” wrote Armstrong. “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.”
The exchange lied about not nixing job offers
Coinbase announced it would ‘slow its headcount growth’ last month but moved to assure all incoming employees that their jobs were safe. However, it reneged on that promise soon after and vacancies that were in the final stages of being filled were slashed at the last moment.
In an email, Coinbase’s chief people officer L.J. Brock told candidates that the measures were due to “the macro environment.”
To soften the blow, it promised one month’s pay and, once again, access to Talent Hub.
There’s always Tron
While Coinbase firings grab the headlines, Justin Sun is ramping up recruitment over at Tron.
The controversial Chinese entrepreneur tweeted on Tuesday that the ecosystem is looking to boost its workforce by 50%. In his message, he directly addressed crypto professionals who have recently become unemployed.
However, desperate jobseekers might do well to consider Sun’s offer very carefully before making that particular move.
Not only is Sun one of crypto’s more colorful characters, he’s also been accused of behavior in the workplace that ranges from inappropriate to just plain bizarre.
According to reports, Sun has in the past referred to himself as ‘Chairman Mao,’ disappeared without warning to commune in forests with spiritual leaders, and been verbally and physically abusive to staff.