On Thursday, June 2, came a truly shocking announcement from Coinbase (COIN). Not only would the publicly traded crypto exchange extend a hiring freeze first implemented two weeks ago, it will also rescind existing offers to new hires, according to a statement.
This is perhaps the most dramatic in a series of layoff decisions by crypto exchanges, which come as both equity and token markets continue to deflate amid the U.S. Federal Reserve’s attempts to fight inflation by hiking interest rates.
Welcome aboard! Oh, wait, nevermind
Coinbase’s decision to pull existing job offers is straightforwardly heinous. Imagine Coinbase offered you a job a week ago. You immediately put in your two weeks’ notice at the box factory where you’ve been grinding to feed your family while spending nights and weekends immersed in crypto. On Thursday you woke up excited to start a new gig in the exciting world of digital assets.
Then you got a god-damned form email titled “Update to your Coinbase offer” and the update was “whoops, nevermind.” Seriously, Coinbase, get your act together. This is shameful behavior.
Public reaction has been predictable scorn. Above all, this is yet another index of Coinbase’s general incompetence when it comes to handling its employees. This is the same company, remember, that accidentally acqui-hired a bunch of murderous fascist spies and triggered a wave of resignations by issuing a hamfisted workplace gag order (the exchange did offer separation packages to employees who left).
But these latest un-hirings (?) don’t just affirm what seems to be Coinbase’s longstanding disregard for its workers. They reveal a dramatic tactical fumble: Throwing the emergency brake on spending this hard suggests nobody at Coinbase saw problems on the horizon even as the crypto market steadily cooled for more than six months. Did nobody grasp the significance of the Fed rate-hike cycle? Rescinding job offers is a flop-sweat panic move born of a failure to plan for clear changes in market conditions. The Fed literally announces forward guidance ahead of time!
Blood in the snow
Yet, while Coinbase once again manages to excel in its public bumbling, it is not alone in facing headwinds. As the crypto economy slows, exchanges have been among the first to reveal cutbacks, in part because more of them are public or regulated firms. Robinhood (HOOD), which offers equity and crypto trading and saw hypergrowth during the coronavirus pandemic, has reversed course to cut 9% of staff. Mexican exchange Bitso and Middle Eastern exchange Rain Financial have also made cuts.