Today, Brian Armstrong has to make the difficult decision to cut the group by 18% to protect his health in this economic crisis. He wants to explain to the team why he chose this below, but first he wants to take responsibility for how they got here.
What has changed?
Over the last month, he has talked extensively with their management and board about what is happening in the market and how their company is doing. Various things have become clear to me as a result of these talks:
The economy is changing fast. After a 10-year boom, it looks like Coinbase will be in recession. Another cryptic winter could be due to a recession and it could last for a long time. In previous cryptocurrencies, our trading income, which is our main source of income, fell sharply. Even though it is difficult to know what the economy or markets will do, they always plan the worst so they can run the business, no matter what.
In weak markets, it is important to keep costs down: Coinbase has gone through four major cryptocurrencies and they have set themselves up for long-term success by carefully limiting their spending on each one. Markets are difficult to deal with and call for a different policy.
business grew too fast. At the beginning of 2021, 1,250 people worked there. At that time, the bull run had just begun and the use of cryptocurrencies went through the roof. Almost every week, new use cases were acquired in which cryptography was possible. They saw the opportunity, but they needed to hire many more people to be able to compete in numerous bets. Since the beginning of 2021, our growth has been 200 percent per year, so it is difficult to find the right balance. Even though they tried to get everything right, Brian now realizes that they have hired too many.
How did things turn out?
The need to keep costs low: Because Coinbase operates in such an unpredictable environment, they want to ensure that they get through a long slump. The team has grown rapidly (by more than quadrupling in the last 18 months) and the cost of staff is too high to handle this fast-paced industry well. Even if this course lasts for a long time, they will cope with it better because of the work they are doing now.
Need to be more productive: They have limited the number of new employees they can add but make us even more productive. In recent months, adding people has made us less effective, not more so. They have seen a lot of slowdown due to problems with coordination and ensuring that new team members are fully integrated. They believe that the systematic improvements they are making to their resources now will help their business become more efficient.
Both are related to Brian’s decision to make the team much bigger over the past two years, so it’s all his fault.
Who will be hurt?
Based on what Coinbase has said its goals are, its top executives have worked hard to figure out what changes each of their teams needs.
“In the next hour, RU will send an e-mail to all employees and tell them whether they will be laid off or not. Every employee affected will be invited to speak directly to your HRBP and the top executives of your company. “Brian commented.
Brian, CEO of Coinbase, told the team: “We decided to restrict access to Coinbase systems for affected employees, so if you are one of them you will receive this message in your personal email. I know that removing access will seem sudden and out of the blue, which is not what I meant. Given how many employees had access to sensitive customer information, this was unfortunately the only way to ensure that even one person did not make a bad decision that harmed the company or himself. . “
He also wants to ensure that all affected employees receive care and assistance when looking for new jobs. People who retire today will receive: A minimum of 14 weeks’ salary, plus an additional two weeks for each year of employment after the first one.
4 months COBRA health insurance in the US and 4 months mental health care anywhere in the world Access to the Coinbase Talent Hub, where Coinbase team members will try to find jobs for you at other companies (including Coinbase Ventures’ portfolio companies and other top VC cryptocurrencies ).
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