How fast is the cryptocurrency industry reversing its recent growth? On Monday night the company Coinbase mocked crypto cynics in an ad during the highly watched NBA Finals. The next morning, the company laid off 1,100 people.
A company spokesperson said the ad, which showed tweets proclaiming “Crypto is dead” throughout the years, was paid for and scheduled months ago in a larger media buy with the NBA. AdWeek and others have pegged NBA Finals ads at around $750,000. Coinbase bought a Super Bowl ad four months ago for $14 million.
The company, which runs an exchange where you can buy, sell, and trade cryptocurrency, is decentralized but has leadership offices in San Francisco.
The layoffs were announced on the company blog, where CEO Brian Armstrong admitted what has become obvious about his and some other crypto companies: “We grew too quickly.”
Coinbase, a company of 1,250 employees at the beginning of 2021, hired about 5,000 people in the year and a half since then, according to an SEC filing. That’s more than two dozen new hires every weekday.
Josh Bersin, a longtime expert on human resources and talent acquisition in tech, told The Examiner last week, “When you hire that fast, you’re taking a huge risk.”
Bersin says investors and stockholders pushed hard for hiring and company growth, then were spooked by inflation and the crypto crash and suddenly called for job cuts. “Within weeks or days, these people were calling for a reverse. You can’t reverse that fast.”
The juxtaposition of an expensive TV commercial proclaiming industry strength stung employees who say they were hit by the recent layoffs.
“These cats really used all the saved money from our rescinded offers to buy an NBA Finals ad that said ‘crypto is dead,’” an employee posted on Blind, the social network that allows users to remain anonymous but verifies where they work via employer email.
A Coinbase employee posting about being laid off said, “We woke up to our laptops/slacks being shut off telling us to wait for an email from people ops. Sorry to all of my friends that were impacted as well! Bye Coinbase peeps!”
Coinbase’s chief operating officer, Emilie Choi, told CNBC the company intends the layoffs to be a “one-time event.”
Coinbase says employees who are laid off will receive a minimum of 14 weeks of severance pay and access to a “Talent Hub,” the company has created to give departing employees help finding a new job.