When Hao Jia received an email from Coinbase that his job offer had been withdrawn, he was on his way to watch the blockbuster film starring Tom Cruise, Top Gun: Maverick. Jia’s friend asked him to see the film for her because she was in China, where the film has not yet been released, and couldn’t see it herself.
Jia, 25, continued to go to the cinema and watch the film despite being emotionally overwhelmed. After Jia secured Coinbase COIN job offer,
To work as a software engineer at the beginning of April, he had turned down another position at the enterprise software manufacturer Oracle ORCL,
for a similar role and finished his interview processes with other technology companies like Google GOOGL,
and Uber UBER,
Now, as an international student on an F-1 visa, he has about four months to get a job in the US. Otherwise he has to leave the country.
Jia isn’t the only person suddenly faced with uncertainty thanks to Coinbase. Last week, Coinbase said it would extend a hiring freeze for both new and filling positions for the “foreseeable future” and revoked some accepted offers “in response to current market conditions and ongoing efforts to prioritize companies.”
More than 300 people with diverse expertise ranging from business operations to marketing and technology recently posted details of their work experience on Coinbase Talent Hub, a website the company created to connect affected candidates with other job opportunities submitted. On LinkedIn, some said they had already left their previous jobs for positions at Coinbase, while others turned down competing offers. Among other things, Jia once described his position on LinkedIn as “aspiring software engineer at Coinbase.” Now the word “incoming” has been underlined, followed by “[rescinded].”
As prices of most cryptocurrencies plummeted, Coinbase initially announced a hiatus on May 16. “Heading into this year, we had plans to triple the size of the company. Given current market conditions, we believe it is prudent to slow hiring and re-evaluate our staffing needs against our primary business goals,” Emilie Choi, the company’s president and chief operating officer, wrote in a blog post at the time. When Jia contacted the company in May to ask if his offering would be affected, the company told him not to worry.
The crypto exchange is expanding at breakneck speed. In February, Coinbase announced it would hire 2,000 employees in 2022. In the first three months of the year, the company hired 1,200 people, bringing the total number of employees to 4,948 as of March 31, almost tripling the number of employees compared to the previous year.
However, after many cryptocurrency prices turned sour this year, Coinbase and other crypto companies slowed down on hiring or even announced layoff plans. Another major crypto exchange, Gemini, said last week that 10% of its jobs will be cut. The move is part of evaluating the business amid “turbulent market conditions that are likely to persist for some time,” billionaire twins Cameron and Gemini co-founder Tyler Winklevoss said in a blog post.
Argentina-based cryptocurrency exchange Buenbit laid off 45% of its employees in May, while another exchange, BitMEX, laid off 75 employees in April, CoinDesk reported.
Buenbit and BitMEX representatives did not immediately respond to requests for comment.
And the problem isn’t just limited to crypto companies. After tech stock sell-offs, Netflix Inc. NFLX,
about 150 employees laid off in May while Twitter TWTR,
announced a hiring freeze and spending cuts. Earlier this month, Elon Musk told Tesla TSLA:
The workforce had to be reduced by 10%.
When Chung Wook Ahn, 27, received the email from Coinbase that his offer had been revoked, he was in South Korea to visit his parents. He figured it was a good time to make the trip, assuming he’d be busy when his full-time role at Coinbase was to start two weeks later.
The subject line of the email he received was titled “Updating your Coinbase offering,” and Ahn thought this might be related to a team-matching poll to watch out for after completing most of his onboarding -Documents filled out. Instead, he was told that his offer, received in February, had been cancelled. Ahn said he was “very angry”.
“I thought it was a sick joke,” Ahn said. “My parents tried to calm my feelings, but they were also emotional because they were too excited too,” Ahn said in a recent phone interview with MarketWatch. In May, Ahn’s parents flew to the United States to attend his graduation ceremony. “Knowing that I got a job and moving forward with my life made them very happy,” Ahn said. “It wasn’t easy for me to break the news to them.”
In preparation for working at Coinbase, Ahn also relocated to Seattle from St. Louis, Mo., where he attended Washington University in St. Louis. Though the location was remote, he hoped to live in a city where Coinbase had offices. Now he’s not sure if he can still pay the rent for the next month. Although the crypto exchange has promised him a severance payment of two months’ salary, he is not sure if he will receive the money in time.
Similar to Jia, as an international student, Ahn only has three months to find a job in the US and maintain his immigration status. “That was one of my biggest concerns,” he said.
“The whole [job searching] It used to take me a lot of time, around six months, from applying to receiving interviews and an offer,” Ahn said. “Thinking of having to do it all over again within three months, I thought it was impossible.” To be realistic, he’s now looking for jobs inside and outside the US
Coinbase’s hiring freeze reflects how much the capital market has changed recently, said Chris Brendler, managing director and senior research analyst at DA Davidson. The company’s move is “about limiting operating losses as well as short-term pressure on sales [crypto trading] Volume is starting to continue to dwindle compared to last quarter,” Brendler said in an interview.
The exchange’s net revenue fell to $1.17 billion in the first quarter from $1.60 billion a year earlier. With the price of the most popular cryptocurrency, Bitcoin BTCUSD,
Down more than 50% from its all-time high in November and others even more, investor interest in crypto has waned, particularly among retail investors. Coinbase reported trading volume of $309 billion for the first quarter, compared to $547 billion in the last quarter of 2021.
Meanwhile, Coinbase’s stock “has been hit pretty hard. I just don’t know if they want to get into the situation where they have to raise capital,” Brendler said. Coinbase shares are down more than 80% from their all-time high in November, recently changing hands at $67.31.
Still, “I think I would characterize it as a market issue rather than a Coinbase issue, although they definitely could have handled it better,” Brendler said.
In fact, after the crypto chaos, for most digital asset companies, “it’s not such a competition for talent at all costs that we’re all just trying to hire as many people as possible in all areas,” said Robert Zagotta , CEO of crypto exchange Bitstamp.
A bear market is “an important time to adjust and make sure you build up for the long term,” Zagotta said. For Bitstamp, “we will continue to hire and invest, but we will be selective so we can maximize our progress in this flat market environment,” Zagotta said.
Michael Wang, chief executive officer of alternative investment platform Prometheus, said he expects companies in this space to continue downsizing. “It’s a reflection of the economy,” which usually underperforms the markets in terms of performance, Wang said.
When deciding between offers from Coinbase and Oracle, Jia was attracted by the higher compensation the cryptocurrency exchange offered him, the opportunity to work remotely, and most importantly, the company’s growth prospects.
“I thought crypto could be the future,” Jia said. “It’s a relatively new industry. But new things aren’t usually all that stable. I decided to bet on it, but this time I lost. I just take responsibility for my choice.”
Not so long ago, Ahn got hooked on crypto as well. “I thought there was hope,” Ahn said. “But now in my situation, I don’t think I share the optimism I had a few months ago.” He said he wouldn’t consider working for another crypto company at the moment, although some came forward after he had shared his experiences on LinkedIn.
“Even for Coinbase, one of the largest crypto companies in the US, I don’t think stability would even be found in the crypto market given how they’ve been affected by this market slump,” Ahn said.
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