When Hao Jia received an email from Coinbase that his job offer had been cancelled, he was on his way to watch “Top Gun: Maverick,” the blockbuster film starring Tom Cruise. Jia’s boyfriend had asked her to watch it because she was in China, where the film had not yet been released, and couldn’t watch it herself.
Jia, 25, went on to the cinema and watched the film, albeit emotionally overwhelmed. After Jia got a job offer from Coinbase COIN,
in early April to work as a software engineer, he has turned down another opportunity at business software maker Oracle ORCL,
for the same role, and terminated his interview process with other technology companies, such as Google GOOGL,
and Uber Uber,
Now, as an international student on an F-1 visa, he has about four months to find a job in the US. Otherwise, he would have to leave the country.
Jia isn’t the only person suddenly facing uncertainty thanks to Coinbase. Last week, Coinbase said it would extend hiring freeze for new roles and replenishment for the “foreseeable future” and will cancel some offers received “in response to current market conditions and ongoing business priority efforts.”
At Coinbase Talent Hub, a site the company created to connect affected candidates with other job opportunities, more than 300 people, with different skills from business operations to marketing and engineering, recently send details of their work experience. On LinkedIn, some said they had left their previous jobs for positions at Coinbase, while others turned down competing offers. Jia, among others, once described her position on LinkedIn as “login software engineer at Coinbase.” Now, the word “login” has been underlined, and is followed by “[rescinded].”
With the prices of most cryptocurrencies falling, Coinbase first announce hiring pause on May 16. “Going into this year, we plan to double the size of the company. Given current market conditions, we feel it is prudent to slow down hiring and reassess our workforce needs against our highest priority business goals,” wrote Emilie Choi, the company’s president and chief operating officer, in a blog post at the time. However, when Jia approached the company in May to ask if her bid would be affected, the company told her not to worry.
Crypto exchanges have been developing at a breakneck pace. In February, Coinbase said that it plans to add 2,000 employees in 2022. It employs 1,200 employees in the first three months of the year, pushing the total number of employees to 4,948 as of March 31, nearly three times the number of employees from the previous year.
However, after the prices of many cryptocurrencies deteriorated this year, Coinbase and other crypto companies put the brakes on hiring, or even announcing layoff plans. Another major crypto exchange, Gemini, said last week that 10% of its job positions would be eliminated. The move is part of a business assessment amid “volatile market conditions that are likely to persist for some time,” billionaire twins Cameron and Tyler Winklevoss, Gemini co-founders, said in a blog post.
Representatives at Buenbit and BitMEX did not immediately respond to requests for comment.
And the problem is not unique to crypto companies. Following a sell-off in tech stocks, Netflix Inc. NFLX,
laid off about 150 employees in May, while Twitter TWTR,
announced a hiring freeze and spending cuts. Earlier this month, Elon Musk said Tesla TSLA,
the number of employees must be cut by 10%.
When Chung Wook Ahn, 27, received a Coinbase email saying his offer had been withdrawn, he was in South Korea visiting his parents. He thought it would be a good time to make the trip, anticipating he would be busy when his full time role at Coinbase is scheduled to begin two weeks later.
The subject line of the email he received was titled “Update your Coinbase offer” and Ahn thought it might be related to the team match survey he was asked to look out for after completing most of his onboarding paperwork. Instead, he was told that his offer, which he accepted in February, had been cancelled. Ahn said he felt “very angry.”
“I thought it was a bad joke,” Ahn said. “My parents tried to ease 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 US to attend his graduation ceremony. “Knowing that I got a job and got on with my life, they were very happy,” Ahn said. “Telling them the news was not easy for me.”
To get ready to work at Coinbase, Ahn also moved to Seattle from St. Louis, Mo., where he attended Washington University in St. Louis. Despite his remote position, he hopes to live in the city where Coinbase is based. Now, he wasn’t sure if he could still pay the rent next month. Even though the crypto exchange had promised him a two-month salary severance package, he wasn’t sure if he would 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 is one of my biggest concerns,” he said.
“Whole [job searching] the previous process took quite a long time, like six months, from applying and finally getting an interview and getting an offer.” said Ahn. “Thinking that I have to do that again in three months’ time, I don’t think it’s possible.” To be realistic, he is now looking for work both within and outside the US
The Coinbase hiring freeze reflects how much has changed in the stock market 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 near-term pressure on the top line, such as” [crypto trading] volumes are starting to steadily fade from where they were in the last quarter,” Brendler said in an interview.
Exchange net income for the first quarter fell to $1.17 billion from $1.60 billion a year earlier. With the price of the most popular cryptocurrency, bitcoin BTCUSD,
down more than 50% from its record high in November, and another down even more, investor interest in crypto has waned, especially with 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 shares “have been hit pretty hard. I just don’t know if they want to get into a situation where they need to raise capital,” said Brendler. Coinbase shares are down more than 80% from their all-time high in November, and recently changed hands at $67.31.
However, “I think I’d classify it as more of a market problem than a Coinbase problem, although they certainly could have handled it better,” said Brendler.
In fact, following the crypto chaos, for most digital asset companies, “it’s no longer a competition for talent at all costs, that we’re all just trying to hire as many people as we can in every area,” said Robert Zagotta, chief executive at crypto exchange Bitstamp. .
Bear markets are “an important time to adapt and ensure you build yourself up for the long term,” Zagotta says. For Bitstamp, “we will continue to recruit and invest but we will be the target, so we can maximize our progress in this flat market environment,” said Zagotta.
Michael Wang, chief executive at alternative investment platform Prometheus, said he expects companies in aerospace to continue cutting staff. “That’s a reflection of the economy,” which usually lags behind the market in terms of performance, Wang said.
When Jia was deciding between offerings from Coinbase and Oracle, she was attracted by the higher compensation the cryptocurrency exchange offered her, the option to work remotely, and most importantly, the company’s growth prospects.
“I think crypto could be the future,” said Jia. “This is a relatively new industry. But new stuff is usually not very stable. I chose to bet, but this time I lost. I will only be responsible for my choices.”
Not long ago, Ahn was also enthusiastic about crypto. “I think there is hope,” Ahn said. “But now in my situation I don’t think I have the same optimism that I had a few months ago.” He said he would not consider working for another crypto company at this time, although several contacted after him share your experience on LinkedIn.
“Even for Coinbase, one of the largest crypto companies in the US, seeing how they are affected by this market downturn, I don’t think stability will be found in the crypto market at all,” said Ahn.
Read: The 24-year-old quit his job at hedge fund powerhouse Citadel to build a new one on the Terra blockchain — which collapsed two months later.