Companies like Twitter and Coinbase have rescinded job offers to save money. But they’re paying a price

Rescinding job offers is a practice that appears to be widening amid cost-cutting efforts, but it will come with backlash. 

Take Coinbase, for instance. Employees at the cryptocurrency exchange platform have created an anonymous online petition calling for removing chief people officer LJ Brock, operations chief Emilie Choi, and product chief Surojit Chatterjee, Fortune reported. One of the complaints in the petition: “Rescinding offers to new employees despite promising them that their offers would not be rescinded two weeks earlier.” 

Following disappointing first-quarter earnings, with its stock getting hammered and the onset of crypto winter, Coinbase decided to rescind “a number of accepted offers” and extend its hiring freeze “for the foreseeable future,” Brock wrote in a blog post on June 2. My colleague Declan Harty spoke with a few individuals whose job offers were rescinded. “I was blindsided,” one candidate told Harty. “I quit a job that I wasn’t required to quit. I don’t know what I’m supposed to do now.”

Twitter is another tech company that rescinded job offers and issued a hiring freeze in May while there was uncertainty surrounding Elon Musk’s pending $44 billion takeover. “This is definitely not a normal practice,” Lars Schmidt, author and founder of HR recruiting firm Amplify, told me. Schmidt’s experience includes former talent acquisition senior director at NPR. “There’s been some public incidents like Coinbase over the past couple of weeks. But this is not a standard operating procedure for HR.” 

I asked him if there are repercussions for companies when rescinding job offers. “Reputation damage, internal morale decline, difficulty recruiting in the short and medium-term” are all possible, Schmidt says. “Also, an increase in other companies recruiting your people because of the perceived instability,” he says. In addition, The Society for Human Resource Management advises employers to seek an attorney’s advice before rescinding an offer because there could be legal consequences. 

Coinbase CEO Brian Armstrong seems more concerned about firing back at employees who’ve protested rather than addressing morale issues. Armstrong tweeted on Friday that the petition to remove three top executives at Coinbase was “dumb.” He wrote: “First of all if you want to do a vote of no confidence, you should do it on me and not blame the execs. Who do you think is running the company? I was a little offended not to be included.” Armstrong continued, “Second, if you have no confidence in the execs or CEO of a company, then why are you working at that company? Quit and find a company to work at that you believe in!”

That’s the tone for the company culture that Armstrong chooses to set. You can read his complete Twitter thread here.

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See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

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Big deal

At the end of May, Broadcom Inc. announced it had agreed to acquire VMware Inc., the cloud-computing company backed by billionaire Michael Dell. The blockbuster tech deal would catapult the chipmaker into a highly specialized area of software. S&P Global Market Intelligence's 451 Research unit decided to survey tech industry leaders to get their sentiments on the deal as there's "a lack of any obvious and immediate synergies between the two companies" from technical, product, and cultural points of view, according to the report. About 133 respondents felt negative about the deal. The survey found that 24% of respondents felt negative about one or both companies before the announcement. Meanwhile, 15% said the product innovation would be limited. In comparison, just 56 of the respondents felt optimistic about the deal. 

Courtesy of 451 Research, part of S&P Global Market Intelligence.

Going deeper

In the latest CNBC survey of CFOs, 68% of finance chiefs said a recession will occur during the first half of 2023. No CFO thinks it's possible for the economy to avoid a recession, according to the report. And, none of the CFOs forecasted a recession any later than the second half of 2023.

Leaderboard

Tracey Doi, group vice president and CFO, Toyota Motor North America (TMNA), will retire effective August 1. Tim Ingle, group vice president, Enterprise Strategy, TMNA, will succeed Doi, and is promoted to group vice president and CFO, reporting to Chris Reynolds, executive vice president and chief administrative officer, Corporate Resources, TMNA.

William J. Kelley, Jr. was named CFO at Tropicana Brands Group, effective at the end of June. Rogier Smeets was appointed CEO, Europe effective June 13. These appointments come as the newly formed joint venture between PAI Partners and PepsiCo continues to build out its leadership team, according to the company. Kelley brings more than 30 years of experience. He joins from Treehouse Foods where he has spent the last six years, most recently as EVP and CFO. He has also served in executive leadership roles at The Kraft Heinz Company and The Hillshire Brands Company.

Overheard

"Such an important milestone: With the agreement on the European Commission's proposal for 40% female representation on company boards, gender equality will be strengthened. As the women's quota for supervisory boards has shown, it needs a quota to drive change."

—Maria Ferraro, CFO and chief inclusion and diversity officer at Siemens Energy, tweeted in response to a Bloomberg report on the European Commission (EU). According to the report, the EU reached a political agreement on a law requiring listed companies to strive for 40% female representation in non-executive director positions in the next four years.