Let’s start with the premise that there’s no right way to tell people they’re being “downsized,” a ridiculous euphemism for dangerous corporate layoffs.
But there are better ways than what Coinbase saw last week. Yes, you can break the bad news and make people feel like they are more than just numbers on a shrinking balance sheet.
Coinbase is a crypto exchange – the largest in the country. Its IPO last year showed its insiders like CEO Brian Armstrong with significant assets.
Just 39, Armstrong is one of those crypto billionaires (aka “bros”). He is unsteady, sure of his business and not afraid to show off his wealth. He made big headlines just a few months ago, doing a spectacular dig in Bel Air for $133 million.
That was when Coinbase was hot, which it certainly isn’t now. It’s losing money, about, like other organizations being crushed in the crypto crash – an epic fail that has dusted off more than 70% of a market that was valued at an irrational $3 trillion last year.
Yes, Coinbase and Armstrong are in the midst of a recession and the excitement that it has caused. The company had about 2,500 employees right after its IPO, which financed a platform that allowed you to trade digital coins like Dogecoin (which started out as a prank) and other weird high-flying tulips. Is.
As the crypto bubble grew, its equally irrational management led by Armstrong began a massive hiring spree, adding 2,500 people with plans to grow to 10,000.
Coinbase was profitable through the craze until reality hit. As the crypto bubble began to lose air, it announced a first quarter loss of more than $400 million with a drop in important metrics such as active users. Coinbase stock is now down nearly 85% from its first day close since last year’s IPO. Analysts say losses are likely to continue.
layoffs happened quickly
Whatever is happening, the company clearly needs to cut costs and fast. 10,000 hiring target reached; A hiring freeze ensued, though Armstrong & Co. wasn’t about to give up on its lofty hopes entirely. He said he would respect offers from new employees – those who left their previous jobs but did not start work at Coinbase.
This was before the crypto correction in recent weeks turned into full-blown panic. Coinbase did what all companies do when they are fighting for survival: it laid off people, cut 18% of its workforce, or 1,100 employees. Also gone is the “commitment” to employees who got offers but didn’t start.
The problem isn’t that Coinbase had to reduce the workforce; It’s that it did it in a way that was even more brutal than when Better.com CEO Vishal Garg fired 900 employees via a Zoom call last year.
Armstrong didn’t give canned workers any good notice, at least according to some former employees of Now.
Those who received the ax on Tuesday learned via a strange text message around 8 a.m. that they received “Important update from Coinbase: Please check your personal email for more information.” That’s right: no management giving phone calls, no town hall meeting telling people how to deal with the pain. No zoom call either.
As employees logged into their work laptops, they read an email saying layoffs were coming. Those who were part of the 18% only knew because within minutes they were suddenly locked out of the company’s computer systems.
A little later that morning, this time in his personal email, he received an official notification of the bad news.
hard in the extreme
I asked the public relations folks at Coinbase to provide an explanation for their apparently excessive calls. Here’s what he told me: The whole thing couldn’t be avoided. Because of the potential for theft of trade secrets, they were required to immediately lay off people who were on the layoff list.
Armstrong apologized for the way he handled it. Later there were convoys with employees and team leaders to explain employment options.
Again, there is no right way to give someone an ax. Layoffs, unfortunately, are among the few ways companies can stay out of bankruptcy until they regain their health.
But I’ve seen better over the years the drama of layoffs on the average streets of Wall Street, where people actually get a call as opposed to an SMS text.
Plus, it doesn’t take a crypto brother to figure out that layoffs in this business are only going to continue – much like the Internet crash of the early 2000s. There are a lot of crypto bros like Armstrong who were thinking that the world was about to change trading Dogecoin.
So a little advice to bros — and I know it’ll date me a bit — but when layoffs come, skip the Zoom calls, text messages, and emails, and try breaking the news the old-fashioned way: a phone call. With or, better yet, face to face.
Yes, Brian, you can do better.
