The cryptocurrency exchange Coinbase announced to employees on Thursday that it had decided to rescind a number of job offers that had already been accepted, blaming the decision on broader economic struggles, as well as a downturn in the cryptocurrency markets.
“While we did not make this decision lightly, it is the prudent one given market conditions,” “Chief People Officer” L.J Brock said in a note to staff, which the company also shared publicly.
Brock said in his note that those affected would be notified by email that they no longer had a job offer in place at the company. Coinbase had decided to take the uncommon step in an effort to “ensure we are only growing in the highest-priority areas.”
The company said it would extend its “generous severance philosophy” to those whose job offers were pulled, though Coinbase did not respond to a request for comment from Motherboard asking for additional details on what that meant. In the note, Brock did say the company was establishing a “talent hub” where people could receive “job placement support, resume review, interview coaching and access to our strong industry connections.”
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Additionally, the company said it would extend what had been a temporary hiring freeze “for as long as this macro environment requires.” Previously, the company had said it was halting hiring as it figured out where to focus resources.
“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 said.
Meanwhile Coinbase is testing an internal app that lets co-workers rank how well one another exemplify “the crypto firm’s 10 cultural tenets—which include clear communication, efficient execution and positive energy—during meetings and other interactions,” according to The Information.
The tech slowdown and crypto crash have together proven particularly tough on Coinbase. The company’s share price has dropped 70 percent so far this year as crypto prices and trading activity both plummeted. In May, the company announced it had lost over $400 million in the first three months of the year, compared to a profit of nearly $400 million one year earlier. A new and required SEC disclosure from the company laying out what would happen to customers' coins in the event of bankruptcy led to fearful rumblings. Following this, CEO Brian Armstrong said on Twitter the company was at “no risk of bankruptcy” but admitted the company “didn't communicate proactively when this risk disclosure was added.”
Other firms are feeling the crunch, too, with Winklevoss-owned crypto exchange Gemini announcing layoffs of 10 percent of its workforce in a blog that attributed the move to "crypto winter."