Coinbase fires new employees due to market conditions and has suspended further job offers for the foreseeable future in order to better navigate the bear market conditions and emerge stronger. Coinbase Global Inc. announced that it will extend a hiring freeze for new and existing positions for the “foreseeable future,” as well as to rescind a number of accepted offers.
The cancellation was communicated to the new hires via an e-mail signed by Coinbase’s Chief People Officer, L.J. Brock. The company changed its hiring plans due to rapidly changing market conditions, according to the e-mail, and the recipient will no longer begin their new position at Coinbase.
To compensate for the inconvenience, Coinbase offered a severance payment of two months’ salary and established a talent hub to assist the unhired in finding new employment elsewhere.
About Coinbase Financial Stability
Coinbase’s first quarter 2022 earnings report, which included bankruptcy language, was released in May 2022, triggering the community. The document specifically stated that user funds could be considered the property of a bankrupt estate. These funds would be subject to bankruptcy proceedings if Coinbase went bankrupt.
Furthermore, Coinbase’s trading volume decreased by 40% in the first quarter of 2022. The declining volume and bankruptcy language raised the question of whether Coinbase would go bankrupt or not. Coinbase CEO Brian Armstrong addressed those concerns a few days later. He dismissed the bankruptcy fears, saying:
Some Wall Street analysts have expressed concern that Coinbase’s fees are excessive. From around 1,700 employees a year ago, the company has grown to 4,948 full-time employees. Hiring contributed to the company’s total operating costs reaching $1.7 billion in the first quarter, a 9 percent increase over the previous three months.
In less than a year, Coinbase has gone from one of the stock market’s most eagerly anticipated debuts to one of its most spectacular crashes. Since the end of its first day of trading last April, the company’s market value has dropped by about $50 billion.
Is This Firing Trend Will Continue?
Considering the market scenario and tech stock is in a downtrend, we can see more of these layoffs in the upcoming future, especially for tech companies with no profit.
On June 2, Gemini’s founders sent a company memo to employees to notify them that 10% of its staff will be dismissed to survive the crypto winter.
Gemini Trust Co., the crypto company run by billionaire twins Cameron and Tyler Winklevoss, informed employees of plans to reduce the company’s workforce by 10%. Rain Financial Inc., one of the Middle East’s largest cryptocurrency exchanges with Silicon Valley backers, also made cuts, laying off dozens of employees.
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