Companies like Twitter and Coinbase have rescinded job offers to save money.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complaints in the petition: “Rescinding offers to new employees despite promising them that their offers would not be rescinded two weeks earlier.”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 My colleague Declan Harty spoke with a few individuals whose job offers were rescinded.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Twitter is another tech company that rescinded job offers and issued a hiring freeze in May while there was uncertainty surrounding Elon Musk’s pending $44 billion takeover.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.
See you tomorrow.
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Courtesy of 451 Research, part of S&P Global Market Intelligence.
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