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Monday, April 15, 2024

Coinbase Offered Them Dream Jobs—and Then Took Them Away

On the Thursday before he was supposed to start his new job at Coinbase, Sam Maher got an email with the subject line “Update to your Coinbase offer.” The update was that there was no offer. In response to “current market conditions,” the startup had eliminated a number of incoming positions, leaving Maher suddenly unemployed and feeling like he’d been broken up with by email.

The same email reached hundreds of other would-be Coinbase employees, who had start dates ranging from the following week to late summer. Vijay Duraiswamy, a software development manager, had already started the onboarding process on a company-issued laptop. Others had signed leases, moved to different cities, or taken expensive vacations to celebrate the new job. Now, Coinbase was offering some severance and an apology.

By the end of the week, LinkedIn was awash in posts from Coinbase’s rejected workers, who seemed angry and confused. Coinbase had planned to hire 2,000 employees in 2022, and had already onboarded about 1,200 by May. If the company needed to scale back, shouldn’t it have done so before making so many job offers? “One of the representatives I later talked to told me it was a ‘prudent’ decision by them regarding the current market situation,” one software engineer wrote on LinkedIn. “I am left speechless of the irresponsibility Coinbase has shown in managing hires and helpless about my current situation.”

Ashutosh Ukey had accepted the offer to work at Coinbase back in March. He had applied to PhD programs, but working for the cryptocurrency startup felt like “a one-of-a-kind opportunity.” Coinbase’s remote work policy also afforded him the ability to move wherever he wanted, and he quickly signed a lease for an apartment in Dayton, Ohio, to be closer to his girlfriend.

When the startup retracted its offer last week, Ukey started panicking. He has lived in the United States since he was 8 but doesn’t have a green card. Instead, he has a STEM OPT visa—an extension of a student visa for STEM students—that only affords him a few months of unemployment. He says recruiters have started reaching out, but he’s not sure he’ll be able to stay in Dayton with a job that is fully remote. “I have no idea where I’m going to be a couple of months from now,” he says.

Duraiswamy, the software development manager, has an H-1B visa, which is common among foreign tech workers. The visa allows them just 60 days of unemployment. “I am not too worried about my job prospects, but I am cautious, as I am still in a long line of waiting for my green card,” says Duraiswamy, who left a job at Amazon to join Coinbase. At least three other rescinded job offers have affected people on immigrant visas, according to public posts on LinkedIn.

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Startups are, by definition, risky businesses. Most of them fail, leaving employees with little to no recourse; companies aren’t even required to give severance pay in most states. Still, several of the people who accepted job offers at Coinbase said they did so because the startup seemed to have reached a level of maturity. It debuted on the public market in 2021 and reached a staggering valuation of $86 billion. Coinbase was in hyper-growth mode, and things seemed promising, especially when many people signed their job offers earlier this spring.

Since then, volatility in the public markets, combined with rising interest rates, inflation, war, and an increasingly dour mood among investors has led startups to slam the breaks. The priority has shifted from rapid growth to profitability. Dozens of startups have made drastic layoffs in the hopes of extending their runway until investors give them more cash. Larger companies, like Meta and Twitter, have issued hiring freezes. Twitter has rescinded some job offers as well.

Besides the broader market conditions, Coinbase has also been affected by the recent carnage in crypto markets. And as a public company, it has to appease its shareholders, who learned in May that revenue had fallen considerably from the previous year. The stock is now down 70 percent since its IPO.

“We always knew crypto would be volatile, but that volatility alongside larger economic factors may test the company, and us personally, in new ways,” wrote L. J. Brock, Coinbase’s chief people officer, in a blog post about the company’s hiring update. Brock added that retracting job offers was not a decision the company took lightly, “but is necessary to ensure we are only growing in the highest-priority areas.” Coinbase declined to comment beyond Brock’s post.

Coinbase offered its former would-be employees severance packages, which ranged from two to three months at full pay, depending on their start date. It also gave them access to a “talent hub,” where they could add their name and résumé for recruiters at other tech companies. So far, 325 people have taken them up on it.

Maher added his name to the list last week, and has resigned himself to the drudgery of interviewing for new tech jobs. He had signed his Coinbase offer back in March, a few months before graduating from UC Berkeley with a degree in computer science. He says that the decision to rescind job offers in June would likely affect a disproportionate number of graduates, like him, who chose start dates soon after getting their diploma. Maher says he understands that relatively inexperienced hires can be expensive and take time to learn the ropes. “But all of this would’ve been solved with better planning,” he says. “It seems like they prioritized growing fast over resilience.”

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