Coinbase is facing an internal crisis as it lays off 1,100 employees

Coinbase, the notorious San Francisco-based cryptocurrency exchange, appears to be grappling with an internal crisis of some sort as it deals with the headwinds of the tech and cryptocurrency industry.

On Tuesday, the company announced it was laying off 1,100 employees — nearly a fifth of its staff. It is the final blow to the rapid reversal of the fortunes of the company; After embarking on a mass hiring spree and giant Super Bowl announcement earlier this year, the company has paused hiring and backed away from job offers that had already been accepted.

But in a routine email to employees sent and made public by Coinbase CEO Brian Armstrong outlining the company’s extremely rapid growth and global economic downturn, one sentence stood out (and not just because it was the highest bid in the layoff notice).

Armstrong explained that the demobilized individuals will have access to all of the suspended Coinbase systems, and that they will receive the news in their personal emails.

“Given the number of employees with access to sensitive customer information, it was unfortunately the only practical option, to ensure that no one made a reckless decision that would harm the company or themselves,” Armstrong wrote.

This part is less routine. It’s not uncommon for CEOs to anticipate that any laid off employee might sabotage the company on their way out, let alone hint at any concern about it in a letter to the public.

What could be the reason for these bad intentions?

Last Friday, a petition to remove chief operating officer Emily Choi, chief product officer Surjit Chatterjee and chief human resources officer LJ Brock was leaked with a vote of no-confidence on the Hacker News tech forum. In it, an anonymous list of employees expressed concerns that their decision-making was not “in the best interests of the company.”

Among the bad decisions listed are: aggressive hiring (and cancellation of job offers), proposal to rank employees after each interaction, “generally apathetic and sometimes condescending attitude” of executives, and most compelling, “inability to produce any higher or better quality products and services” Although hiring more employees aggressively.”

Instead of not responding – or responding to brawling through internal channels – Armstrong made a bad name for people who wrote and shared this publicly in the 16-Tweet TopicHe described the petition as “really stupid.” (The authenticity of the note is unclear, but in his response Armstrong legitimized the letter.)

There is probably a lot we could do better, Armstrong wrote in response, but if you’re in a place where you want to leak things externally, it’s time to go. “You hurt yourself and those around you.”

Forum commentators have criticized Armstrong for publicly dragging his workers, calling him “boyish” and advising him to “listen to his point”. But more importantly, the concerns of these employees listed were not entirely different from those that Armstrong cited as factors that led to these mass layoffs.

“We wouldn’t be where we are today without your hard work and dedication to our mission,” Armstrong wrote in his announcement Tuesday. “I am so grateful for everything you have done to contribute to our success.”

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