Coinbase announced today that it will extend its hiring freeze and revoke accepted offers from some candidates who haven't started their roles yet.
The third-largest crypto exchange by volume, Coinbase began to slow hiring two weeks ago, but this move is more drastic.
"Adapting quickly and acting now will help us to successfully navigate this macro environment and emerge even stronger, enabling further healthy growth and innovation," Chief People Officer L.J. Brock wrote in a company memo, shared publicly to Coinbase's blog.
Brock added that the hiring freeze will persist as long as the macroeconomic downturn continues, and that the freeze will also apply to backfills. However, any role that is necessary for security and compliance will still hire a replacement.
"We will also rescind a number of outstanding offers for people who have not started yet. This is not a decision we make lightly, but is necessary to ensure we are only growing in the highest-priority areas," the note continued. "All incoming hires will be advised of their updated offer status today by email."
People whose offers were rescinded will be eligible for Coinbase's "generous severance philosophy," on which the letter does not elaborate. But in late 2020, when CEO Brian Armstrong invited employees to resign if they were upset with the company's "apolitical" mission, Coinbase's severance packages supported employees for four to six months, depending on their length of employment, with six months of health coverage through COBRA. The company is also establishing a "talent hub" to offer impacted individuals additional support, like interview coaching and resume review.
"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 wrote. "If we’re flexible and resilient, and remain focused on the long term, Coinbase will come out stronger on the other side."
Heading into 2022, Coinbase planned to triple its headcount. But in its first quarter financial results, the company said that limiting headcount could be a way to manage costs. The company reported a $430 million loss, a bad omen for a crypto exchange that depends on trading activity for most of its revenue.
The crypto platform Gemini, led by co-founders and twin brothers Cameron and Tyler Winklevoss, also announced today that it was curtailing its workforce. Gemini laid off 10% of its staff due to "turbulent market conditions that are likely to persist for some time."
Unfortunately, this turmoil extends far beyond the crypto space. In May alone, it's estimated that 15,000 tech workers lost their jobs as companies try to cut costs during a challenging economic time.