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Coinbase lays off around 1,100 employees
- namanaggarwal 4y agoGenuine question: At what point do we actually declare that we are in recession. Do we wait for GDP figures out these signs are enough to assume we are in bear markets now.
- jeffbee 4y agoReal GDP has to shrink for it to be a recession. GDP in the United States is currently growing strongly. The Conference Board is not predicting a recession in the U.S. in 2022, and they just updated their forecasts a few days ago.
- mehrdada 4y ago> GDP in the United States is currently growing strongly Last quarter was -1.4% growth, so probably not growing strongly (but who knows, maybe just a blip...) https://www.wsj.com/articles/us-economy-gdp-growth-q1-11651108351 https://www.wsj.com/articles/us-economy-gdp-growth-q1-116511...
- jeffbee 4y agoAnd Q2 is anticipated to be +2.1%, based on late-Q2 analyses. One quarter of stochastic sign change does not get you a recession. A more pessimistic view gives +1% for Q2: https://www.atlantafed.org/-/media/documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf https://www.atlantafed.org/-/media/documents/cqer/researchcq...
- justinzollars 4y agoAtlanta FED GDPNow recently downgraded expectations: https://www.atlantafed.org/cqer/research/gdpnow https://www.atlantafed.org/cqer/research/gdpnow This is typically an accurate measure.
- jeffbee 4y agoSure. And if GDP goes negative, and if employment falls etc etc then people will start saying recession. I was just trying to answer the GPs question, not predict whether or not this is a recession! By the way the official declaration by the U.S. bureaucracies of the onset of a recession typically lags the actual onset by a year or so.
- bad_alloc 4y agoSome crypto collapsing does not mean it is a recession. The exploding prices for real goods and less and less people being able to afford basic things are the indicator for that.
- Johnny555 4y agoRecession is a loosely defined economic term where the exact definition depends on who's reporting it, traditionally, it's meant 2 quarters of decline in GDP growth. But now: The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales https://www.investopedia.com/terms/r/recession.asp https://www.investopedia.com/terms/r/recession.asp But recession is a macroeconomic term that may not reflect the actual impact on consumers -- conusumers could be suffering through an economic downturn that's not technically a "recession".
- tootie 4y agoYeah, recession start and ends can only really be determined accurately in retrospect. And like you said it's marked by the decline meaning it starts when growth hits its high point and ends when it hits a low point. In terms "feeling" like a recession, it'll be more like midway through the descent until midway into a recovery. A stock market crash is frequently a leading indicator of a GDP recession though not always. We could be seeing the early signs of recession for the past six months, but we won't really know for a while.
- antoniuschan99 4y agoPolitically it could be after midterms was an idea floating around
- fortuna86 4y agoCrypto was always a plaything for people that had extra money and no idea what to do with it. That extra money dries up, guess what happens to crypto.
- wollsmoth 4y agoI think the actual rule is 2 quarters of GDP decline in a row. We had one, seems like we'll have another.
- Geee 4y agoThis is pretty good: https://trends.google.com/trends/explore?date=all&q=recession https://trends.google.com/trends/explore?date=all&q=recessio...
- davesque 4y agoIt's a legitimate question, although I wouldn't use stories about Coinbase as any indication about the answer.
- MisterBastahrd 4y agoWhen growth actually slows. The stock market has little to do with whether we are in a recession. If it fell by 10K points tomorrow, most stocks would still be wildly overvalued.
- ErikAugust 4y agoHowever, I did notice their prominent advertising at the NBA Finals...
- celestialcheese 4y agoProbably already committed money. Still a terrible look.
- gnicholas 4y agoIt must have been hard for them to come up with an ad over the last couple months that they knew would be relevant/accurate no matter what happened in the markets. I wonder if they had a different ad prepped and then subbed this one in because of what happened. It was a visually simple ad and presumably could have been created at the last minute.
- willturman 4y agoCrypto is dead.
- m00x 4y agoBold claims like this is what make people look like idiots when things turn around. With experience though, you can tell that people who make bold claims like this were always idiots gambling away their credibility, hoping the 50/50 lands in their favour.
- wonnage 4y agoThere’s no turnaround coming
- TameAntelope 4y agoAn equally as irrational position as, "Crypto is the best thing ever!"
- a4isms 4y agoWould this be the Coinbase whose CEO just spent $133 million on a home? https://www.ibtimes.com/inside-coinbase-ceo-brian-armstrongs-133m-house-10-bedrooms-13-bathrooms-3372510 https://www.ibtimes.com/inside-coinbase-ceo-brian-armstrongs... Capitalism is a harsh mistress.
- daenz 4y agoThere's nothing wrong with people collectively giving someone money.
- unethical_ban 4y agoWith the context of what wealth inequality is doing to society and what political power raw money brings to people, I posit there is a line where it is wrong.
- missedthecue 4y agoBezos is probably the most unpopular person in Washington. We don't have a president Bloomberg. I submit to you that you are vastly overestimating the amount of political power having money automatically brings someone.
- ihumanable 4y agoPower and office are two different things. Someone can exercise a great deal of power in advancing or killing legislation while never holding office and allowing all the office holders to call them names on TV. What matters is what policies are enacted. Here's a nice video on the topic that summarizes a Princeton study https://www.youtube.com/watch?v=5tu32CCA_Ig https://www.youtube.com/watch?v=5tu32CCA_Ig
- samhw 4y agoPowerful people have long weaponised self-deprecation as a means of letting off steam and blunting more serious attacks. (That theme is elaborated very well in the LRB here: https://www.lrb.co.uk/the-paper/v35/n14/jonathan-coe/sinking-giggling-into-the-sea https://www.lrb.co.uk/the-paper/v35/n14/jonathan-coe/sinking....) Michael Bloomberg is actually a great example, in how his campaign relied so heavily on irony and self-deprecation to defuse the (anticipated) discomfort around electing an old white billionaire.
- sillysaurusx 4y agoI think if employees feel slighted by being fired, they're fooling themselves. The best mindset is that you could be gone tomorrow. It gives you clarity and purpose. It also happens to be the truth. Coinbase was also extremely generous with severance. 12 weeks plus two for every one year at the company, I think. I've had the experience of being let go without notice and without severance. Devs seem a little more grizzled this time around, so I think this mindset is slowly becoming the norm. College grads seem skittish, but they always are. People keep pointing to Armstrong's $110M house like it's some sort of injustice. If you think billionaires should exist at all, then that's one of the least-bad injustices imaginable. It's probably true that no Armstrong, no Coinbase, and 10% of Coinbase is the prize. EDIT: It's actually 14 weeks: https://blog.coinbase.com/a-message-from-coinbase-ceo-and-cofounder-brian-armstrong-578d76eedb12 https://blog.coinbase.com/a-message-from-coinbase-ceo-and-co... Three and a half months of dev salary is pretty incredible.
- deeptote 4y ago
- sillysaurusx 4y agoI do tiktok dances mostly, but weddings are fun too. The point is, I'm not sure there are any issues. People don't like change and uncertainty. But uncertainty is a fact of life. It's so much nicer just to accept it and move on. It helps you in the long run too.
- john_yaya 4y agoMy severance don’t jiggle-jiggle, it folds. Converted it to fiat, you really oughtta see it.
- 5d8767c68926 4y agoWhat exactly is the issue? Company predicts that the market is not going their way, and they are tightening their belt. Sucks to be on the receiving end, but are they supposed to keep all employees forever, business conditions be damned?
- raesene9 4y agoI see they cut off access for staff before telling them. not an atypical move, but I wonder if they were actually able to revoke all access, given there's systems like Kubernetes where some auth. types can't be revoked once granted.
- JamesSwift 4y agoI would expect there to be a VPN in place with revokable login
- raesene9 4y agoAs long as their cluster API servers aren't on the Internet.... which is a default for AKS, EKS, and GKE :) (there's 1.3M servers identified as Kubernetes directly on the Internet according to Shodan's latest stats).
- bombcar 4y agoWhich is why even with zero-trust and such, things like a VPN can be useful as a "catch-all".
- 734129837261 4y agoMost people will have worked on laptops that have the software installed that allows them to completely brick the device. It just makes me wonder what they'll be doing with 1000+ laptops and other devices. Do they expect people to send it back? Probably yes. I'd personally just declare: "I have low money and I had to fire your laptop service, thanks for the work of getting it to me, I'll be keeping it now." I mean, that's what they do with the work of their employees. "I have low money and I had to fire you and 1000+ others, thanks for the work of making my company big, I'll be keeping it now."
- 8cmj7A 4y agoAirbnb allowed folks to keep their laptops after their recent round of layoffs. Presumably these laptops are managed by IT with the ability to remote wipe. If not, I feel sorry for the folks in charge of rounding up all this hardware to likely sit around and rot.
- hintymad 4y agoWhy they need these many people for an exchange is puzzling. I’m sure there are many things to do, but shouldn’t they grow their headcount organically and slowly?
- julianlam 4y agoWhen you have obscene amounts of money, your perception of what is normal goes out the window.
- jstummbillig 4y agoDo tell. On a more serious note and the likely answer to the question: customer support for 100000000 customers (as has been pointed out elsewhere in this thread)
- hintymad 4y agoI thought people would have learned from Uber’s gross failure of overhiring by now and taken a few pages from Netflix’s playbook
- azemetre 4y agoWhat is Netflix doing differently? I know they had some internal struggles between different media faces (prestige content versus chasing the masses), are you referring to them paying high salaries but having a smaller workforce?
- hintymad 4y agoThey used to have small teams to build great systems, like 4 people taking care of a very sophisticated monitoring infra[1] [1] https://www.quora.com/Are-Netflix-employees-really-that-good/answer/Yong-Yuan?target_type=answer https://www.quora.com/Are-Netflix-employees-really-that-good...
- greggsy 4y agoThey have a few different service offerings, ranging from compliance to web3 infrastructure: https://www.coinbase.com/cloud/blockchain-infrastructure https://www.coinbase.com/cloud/blockchain-infrastructure They also presumably have hefty cyber, legal and financial audit teams to protect their assets, and position themselves in preparation for any changes in the landscape (which has been pretty rocky to say the least).
- idealmedtech 4y agoPrevious discussion (694pts, 550 comments) https://news.ycombinator.com/item?id=31738029 https://news.ycombinator.com/item?id=31738029
- repomies69 4y ago[flagged]
- newaccount2021 4y ago
- BonoboIO 4y agoBeing an employee in a high risk field like crypto is a tough business. You are everyday one day away from a massive market crash or crypto heist to be let go. (Yes, conventional companies too, but not to this extent)
- repomies69 4y agoOn the other hand they could've been growing much more modestly, and then there wouldn't be any layoffs. Not much different to other IPOing companies, many are doing layoffs now. Crypto has little to do with it.
- greggsy 4y agoPeople were gainfully employed during that period, and are receiving generous severance by any measure. The alternative is that those people aren’t employed at all, or working in another job that might be just as risky. Crypto has a lot to do with it: The industry itself is known for its volatility, so there’s some expectation that they took up the role with an understanding of the risks to those tenure. This isn’t a McDonald’s or Walmart hiring unskilled labour at low rates, knowing full well that people are replaceable.
- joshmarinacci 4y agoCoinbase had over 5k employees?!!! WTF. What were they all doing?
- fortuna86 4y agoGotta spend that seed rd money somehow
- Geee 4y agoProbably customer service. They have about 100 million customers, so 1 employee per 20000 customers.
- popcalc 4y agoI'd wager 40-50 million of those are accounts opened under false/stolen identities.
- DoubleDerper 4y agoCoinbase is notoriously poor at customer service, so this doesn't make sense. https://news.ycombinator.com/item?id=27653022 https://news.ycombinator.com/item?id=27653022
- oh_sigh 4y ago1 employee per 2000 customers seems like it makes perfect sense as to why customer service would be bad.
- jmyeet 4y agoI honestly thought the pandemic would be the trigger for a recession. Clearly that wasn't the case (or at least it was a delayed effect). This doesn't seem to be a case where a single event triggered a recession (eg subprime in 2008). It seems to be a combination of events. Inflation is a big one. This one is interesting because the two biggest factors (housing and gas) are completely artificial price hikes. Housing is a double whammy because we had artificially cheaper housing in the last 2 years because of the pandemic. That makes price hikes seem worse than they are (note: there still are significant price hieks in rents). There's pent up demand from the pandemic. There's some institutional buying of homes (which honestly should be outlawed). But really it's just price hikes "because we can". Gas was triggered by Ukraine but that's just another "because we can" situation. The Biden administration could ban exports of refined petroleum products if they really wanted to apply downward pressure to gas prices. It's not that Biden has a bad energy policy. He seems to have no energy policy. And then there's crypto. What a lot of people are learning is that the only thing holding up the crypto bubble was the collective belief in continued speculative gains. That's literally it, even for the (supposed) stablecoins. I personally see crypto as a massive waste of energy (eg Bitcoin energy usage is about the same as Sweden's) for very little utility so I personally hoped the bubble would burst because crypto is such a massive example of a solution desperately searching for a problem. I can't say this was or is inevitable. Collective delusion can last a really long time. But I hope the bubble does burst. Obviously this sucks if you work (or, rather, worked) for Coinbase. At least they're getting some severance. It may be a rough time for finding a new job, even for software engineers, for a couple of years, something that hasn't really been true for >12 years.
- whimsicalism 4y ago> But really it's just price hikes "because we can". This is just an absolutely wrong-headed understanding of what is causing inflation that is premised on some corporate benevolence that existed prior to 2020 that no longer exists. [0] The question to ask is "why are prices able to be raised now"? The answer is contracting supply and surging demand. [0]: https://twitter.com/Noahpinion/status/1525171240796712960 https://twitter.com/Noahpinion/status/1525171240796712960
- tootie 4y ago
- joering2 4y agoIn my opinion this is what greed does to people. Doesn't matter your background. Armstrong was here on HN pointing out his vision of free exchange of currency at close to zero rates. He wanted to fight "the big guys", including credit cards mafia and PayPal mafia. What A WONDERFUL goal. What he ended up with, is obnoxious exchange rates @ Coinbase (triple what credit cards charge), hundreds of thousands of ruined lives, lots of suicides, and $100 million dollar mansion. What A RECORD. Don't get me wrong - I would love to live Armstrong's life (although I wouldn't be this shrewd), but as someone who believes in heaven and hell, I definitely would not want to die as Armstrong.
- djbusby 4y ago"lots of suicides" - that's bold claim. In searches I've only found one related to CB. One is not "lots"
- joering2 4y agoyou don't know cryptocurrency took a lot of lives?? https://twitter.com/JohnBrownlow/status/1524375188426702849 https://twitter.com/JohnBrownlow/status/1524375188426702849
- sytelus 4y agoYou can't attribute suicides of people investing in crypto to Armstrong. I think Armstrong had a great vision and ok execution (I would give grade D but not F). Overhiring was irresponsible. Out of control costs were unneccessory. But you have to understand that founders in this space have enormous pressure to grow, try new ideas and new products as they are constantly at risk by other players (Cashapp, Paypal etc). Before Coinbase, investing in crypto was super murkey even without all the volatility. They were able to make crypto accessible and provide marketplace that is not full of scams (so far). For people who controlled their risk by not exceeding crypto investment beyod 1% of their networth, it was great way to get in the market. If Ukrain war + COVID didn't exist, they had a decent chance realizing vision. If they can survive the storm, I think they would still be the most trusted crypto marketplace.
- asien 4y agoNo surprise, just like Uber , Airbnb etc..coinbase has been overstaffed ever since they raised a major amount of capital many years ago... Hence , I don’t see what 5K people can be doing at coinbase since some startups in Europe are doing the same with like 100 people... It’s been known for years : startups overhire and lay-off when recession comes up. With the “nazi revolution” in the 50’ , most startups rely exclusively on “Social Darwinism” , to solve problems or improve products , by having them fight internally and let the best ideas come to executives. Of course only employees who know how to navigate corporate politics are able to reach them and win those fights.. Those 1000 were not part of it, but they will have no problem finding another position somewhere else.
- Grustaf 4y agoHow can they even have 1100 employees? That's more than the East India Company needed to run a whole subcontinent, probably.
- whimsicalism 4y ago1100 is not even close and populations were much smaller.
- pphysch 4y agoEIC was working in concert with other major British institutions including the military. They probably had 100,000s of personnel in total.
- neals 4y agoYes, the East India Company ran a much more efficient crypto exchange, obviously.
- valar_m 4y agoEast India Company employed 260,000 soldiers alone, not even counting the entire rest of the company. That took 20 seconds to find. https://en.wikipedia.org/wiki/East_India_Company https://en.wikipedia.org/wiki/East_India_Company
- deleted 4y ago[deleted]
- kingboss 4y agoWasn't this guy one of Paul Graham's darlings? Weren't the "geniuses" at YCombinator invested in this pile of trash? I would really like one of those "insightful" posts from pg telling us how to pick winners right about now.
- joezydeco 4y agoWe went over this 9 years ago. When you posted anything negative and mentioned YC in the headline, the mods edited the headline. When Coinbase went dark during the first crypto winter (or was it the second?), asking for some/any help here was ridiculed by the YC powers that be (i.e pg)
- deleted 4y ago[deleted]
- elefanten 4y agoCoinbase is one of the top competitors in its space. They picked a winner. What's your point? Are you confusing the market they're in contracting (alongside the whole market) with them losing?
- kingboss 4y agoTop competitors in a scam. Just like NFTs. And boys like pg are into this (both Coinbase and some NFT company that I forgot its name). And you are defending them. And you don't see any problem. And that is the problem. No values was created here. Just moving value around. Usually into the pockets of some already very rich people.
- 2OEH8eoCRo0 4y agoHow did they possibly employ that many to begin with?
- Spivak 4y agoI feel like people ignore that most areas of a business grow in lock step with its size and that IT is the exception not the rule. Like insurance companies and banks are just as much “tech” as anything else in crypto and nobody balks at them having skyscrapers plural worth of employees.
- outside1234 4y agoCoinbase had over 6000 employees?!?!?!
- deleted 4y ago[deleted]
- jquery 4y agoPrediction: Coinbase will do a reverse Robinhood and start offering traditional brokerage products as crypto is further exposed as a scam.
- adharmad 4y agoFTX is already planning to do that.
- namaria 4y agoWe're achieving on this thread levels of boot-licking previously considered entirely theoretical
- wly_cdgr 4y ago
- sytelus 4y agoI don't understand why Coinbase is feeling such a crunch. They are just middleman in buying and selling. Their advantage is supposed to be that they make money whether crypto goes up or down. How can they screw this up?
- miketery 4y agoThey are no longer in a position to charge exuberant fees due to competition. And they depend on new inflows, in a bear market inflows are low - mostly out flows. Pie is shrinking.
- fullshark 4y agoAll i can think is they had bad forecasts based off trade volume during COVID when people had a ton of stimulus cash and nothing to do all day. Another possibility is something involving solvency in case a crypto selloff + run happens which seems possible any day now.
- arnvald 4y agoTheir expenses are based on predicted growth in the volume of transactions. They're making money no matter if crypto goes up or down, but they stop making money when people stop trading.
- ineedasername 4y agoThey make money on trading, sure, but it's a % not a flat fee. The same # of trades can occur for the same # of coins but if the market cap of those trades is 50% lower then they're making a lot less money.
- skizm 4y agoThey make money when trading volume is up. Trading volume and BTC price are pretty much directly correlated. Trading volume is way down.
- SirYandi 4y agoI imagine they do own significant amount of crypto. Also, less people are buying as the price dips.
- formvoltron 4y agowhat the heck did all those people do!?
- manicksurya 4y agohmm. looks like the total mentality of an entrepreneur changes when the company becomes public. with VC funds, the entrepreneur focuses on execution and builds and with IPO, its ok for entrepreneurs to lose vigor and can buy millions worth property and also lay off employees. In the end, it has nothing to do with open society or for the people. its all about money and its just greed.
- rgifford 4y agoGo back and read the HN thread from the Coinbase DPO [1]. Their valuation was insane then, before the war in Ukraine, inflation, or Omicron. The top comments on that thread shock me. Even at that time I expected every other comment to be about how overvalued they were, but it just wasn't the case. Wonder if people could've been made to see this then. I went full on Chicken Little [2] and mostly just got treated like I was yelling at children to get off my lawn. 1. https://news.ycombinator.com/item?id=26808275 https://news.ycombinator.com/item?id=26808275 2. https://news.ycombinator.com/item?id=26808275&p=2#26812175 https://news.ycombinator.com/item?id=26808275&p=2#26812175
- benmw333 4y agoI keep reading all this "we" stuff...
- trhway 4y agoNPR has just aired a short interview with a former Coinbase PM. She is a founder of a crypto fund now and has never been that optimistic like now with crypto expanding, NFT, many more developers coming into crypto, etc.
- wly_cdgr 4y agoWhy would you ever run a company at this stage so close to the edge that a 10% reduction in payroll makes a meaningful difference to your bottom line even after adjusting for the immense morale and PR hit? Seems so wildly irresponsible. Did they really fail to plan for such an obviously plausible scenario as what we are experiencing now? Or was the explicit plan always "eh, we'll just throw some people overboard"? Not to mention, what the fuck are you doing if you're not in an obsolete industry but each extra employee is not making you money?
- azpa 4y agoThis prognosis was the final straw caused me to exit the market as it sounded like Brian wasn’t expecting a recovery in any reasonable time period. Furthermore, I felt that other asset classes were overvalued when I got into crypto and I hardly think that’s it’s currently the same. It also turned out to not be the inflation hedge I originally assumed it would be. Part of my current assertion is that cryptos value is tied to retail investors - the same who need to pull out of the market to deal with Very real expenses. Let’s also give credit where credit is due. Brian may also be using the economy as cover. Give credit where credit is due - FTX came in and ate their lunch. Hats of to them.
- Zaskoda 4y ago> It also turned out to not be the inflation hedge I originally assumed it would be. This is a common misconception. I've never understood why people have had such unrealistic expectations of Bitcoin's price performance during the initial phase of inflation. There are two types of people who buy Bitcoin: one that holds it for the long term and the other that treats it as a speculative investment, perhaps even swing trading with it. Access to cheap borrowing and a dramatic increase in the money supply has overpriced Bitcoin as speculators buy in. It has to correct. Now, as the money supply begins to shrink and access to cheap debt comes to an end, speculators are forced out of the market. They need cash to cover their debts. Thus, as all markets begin to fall, Bitcoin is going to fall with them. A lot of us have always expected this to be the case. Eventually, once the speculators are washed out, we'll hit a floor. We might be there already. We might have a way to go. But there will be a floor. The correction across all markets we've seen so far is just a market adjustment back to reality. Meanwhile, the debt bubble hasn't really started to "pop" just yet. We've seen record levels of debt lately, corporate debt in particular. Now we will begin to see over-leveraged companies begin defaulting on their debt as they head into bankruptcy. This will be the real crash. The full scope of this is unknowable. But there's reason to believe it will be historic. Meanwhile, Bitcoin has no debt. Bitcoin doesn't care. Bitcoin will just keep on being Bitcoin. At some point, people will begin to notice that Bitcoin is the only thing that's not falling anymore. This will be the moment of change.
- echelon 4y ago
- zombiwoof 4y agothe most ridiculous thing is: they tried to recruit me 8 months ago. it was all unicorn and rainbows and bullshit this is the future. so if just 8 months ago, the CEO who has a 110 MILLION DOLLARS house couldn't see 12 months into the future, and required 18% reduction in headcount because of some unforseen crypto winter, who really is at fault here? what a fool that CEO is, and glad I turned the job down and feel bad for the people who were sold the cool aid.
- lightbendover 4y agoCan you please explain why you believe a CEO should be able to see into the future and correctly account for all of the interactions of the global economy? If you can't, I guess just complain about billionaires instead or something.
- dogecoinbase 4y agoIf they can't, they're wildly overvalued.
- ineedasername 4y ago8 months ago inflation looked much more manageable, the Delta surge was ebbing & Omicron not yet casting it's shadow, and the Russian invasion of Ukraine hadn't upset Western geopolitics & kicked an already suffering economy in its commodity balls. It appears they were hiring far too aggressively even at that time, but I think the CEO can be forgiven for not anticipating the current state of affairs.