Coinbase offered them their dream job, then took them away

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On Thursday before he had to start his new job in Coinbase, Sam Maher received an email with the subject “Update Coinbase Offer”. The update was that there was no offer. In response to “current market conditions,” the startup liquidated a number of job openings, leaving Maher suddenly out of a job and feeling like he’d been terminated by email.

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The same email was delivered to hundreds of other potential Coinbase employees, whose start dates ranged from next week to the end of the summer. Vijay Duraiswami, Software Development Manager, has already started the onboarding process on the company’s laptop. Others signed leases, moved to another city, or took expensive vacations to celebrate a new job. Now Coinbase was offering severance pay and an apology.

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By the end of the week, LinkedIn was inundated with messages from rejected Coinbase employees who looked angry and confused. Coinbase planned to hire 2000 employees in 2022 and have already connected about 1200 by May. If a company needed to cut costs, shouldn’t it have done so before it made so many job offers? “One of the reps I spoke with later told me it was a ‘prudent’ decision given the current market situation,” wrote one software engineer on LinkedIn. “I am speechless due to the irresponsibility that Coinbase has shown in hiring management and helplessness regarding my current situation.”

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

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When the startup withdrew its offer last week, Ukey began to panic. He has lived in the United States since the age of 8, but he does not have a green card. Instead, he has a STEM OPT visa — a student visa extension for STEM students — that gives him just a few months of unemployment. He says recruiters have started contacting him, but he’s not sure he can stay in Dayton with a full remote job. “I have no idea where I will be in a couple of months,” he says.

Duraiswami, a software development manager, has an H-1B visa, which is common among foreign technicians. The visa gives them only 60 days of unemployment. “I’m not overly concerned about my job prospects, but I’m cautious as I still have a long queue waiting for my green card,” says Duraiswami, who left his job at Amazon to join Coinbase. According to public posts on LinkedIn, at least three other canceled job offers affected people on immigrant visas.

Startups are, by definition, a risky business. Most of them fail, leaving employees with little to no help; companies are not even required to give severance pay in most states. However, several 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 achieved a staggering rating in $86 billion. Coinbase was in hyper-growth mode and everything seemed promising, especially when many people signed their job offers this spring.

Since then, volatility in the public markets, combined with rising interest rates, inflation, war, and an increasingly gloomy mood among investors, has forced startups to clap their hands. The priority has shifted from rapid growth to profitability. Dozens of startups have made sweeping layoffs hoping to expand their runway until investors give them more money. Large companies such as Meta and Twitter have imposed a moratorium on hiring. Twitter has also canceled some job offers.

In addition to broader market conditions, Coinbase has also been affected by recent slaughter in the crypto markets. And as a public company, it needs to reassure its shareholders, who learned in May that revenue had fallen significantly from the previous year. Shares are now down 70 percent since the IPO.

“We always knew that cryptocurrency would be volatile, but this volatility, along with larger economic factors, could test the company and us personally in a new way,” wrote LJ Brock, director of human resources at Coinbase, in an interview. Blog Post about the renewal of the company’s hiring. Brock added that withdrawing job offers was not an easy decision the company made, “but it is necessary to ensure that we grow only in the highest priority areas.” Coinbase declined to comment on Brock’s post.

Coinbase offered its former potential employees a severance package of two to three months on full pay, depending on their start date. It also gave them access to “talent centerwhere they could add their name and resume for recruiters at other tech companies. So far, 325 people have used them.

Maher added his name to the list last week and has resigned himself to the routine of interviewing for new technical positions. He signed his offer to Coinbase back in March, months before graduating from UC Berkeley with a degree in computer science. He says the decision to withdraw job offers in June is likely to affect a disproportionate number of graduates like him who have chosen start dates shortly after graduation. Maher says he understands that relatively inexperienced hiring can be costly and takes time to learn the basics. “But all this could be solved with better planning,” he says. “They seem to have preferred the rapid growth of resilience.”


Credit: www.wired.com /

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