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Market fallout and growth sector layoffs have dominated the business news cycle. Thousands have not only watched their portfolios evaporate but have also been laid off from their cushy high-paying tech jobs. What if we told you that by leveraging your knowledge of the future of work and web3, you can ensure long-term economic security and workplace zen. This is not investment advice, it's a free framework for building the business of you.
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Coinbase has laid off 18% (1,100 employees) of its workforce. In a blog post, CEO Brian Armstrong said the U.S. economy is likely heading into a recession, which could trigger a crypto winter. Armstrong noted that while Coinbase has overcome four crypto winters, the company has to manage its costs as trading volumes have fallen significantly during the past. Armstrong admitted that the company overhired in the past year, noting that before the layoffs it had 5,000 employees, up from 1,250 at the beginning of 2021.
The Coinbase layoffs don’t necessarily come as a surprise given the broader sell-off occurring in the crypto market. Earlier this month Coinbase imposed a hiring freeze and began rescinding job offers. Employees have become so frustrated that they circulated a now-deleted petition calling on the company to terminate COO Emilie Choi, chief product officer Surojit Chatterjee, and chief people officer LJ Brock via a no-confidence vote. Employees outlined eight issues with the company: its unsuccessful NFT marketplace launch, a “toxic workplace culture,” and their “unsustainable” hiring plans.
Armstrong called the petition “really dumb” and said employees should quit if they don’t believe in the company’s mission.
Crypto is not alone!
Unsurprisingly crypto skeptics have conveniently used the recent layoff news and the decline in bitcoin’s price to ramp up their criticism of the industry. However, it’s worth noting that layoffs and hiring freezes are occurring across the board, including at widely revered FAANG companies.
Netflix, which was once everyone’s go-to streaming service, has seen its market share decline in recent years amidst fierce competition from rivals such as Disney+ and Amazon Prime Video. In May, Netflix laid off 2% (150 employees) of its workforce, just months after it revealed that it lost 200,000 subscribers in Q1, its first decline since 2011.
Facebook has imposed a hiring freeze, while Amazon admitted to overstuffing its warehouses. Why? Well, it has to do with both macro conditions (such as higher interest rates and inflation) and industry-specific issues (such as Apple’s App Tracking Transparency feature reducing the effectiveness of Facebook ads).
Over 16,000 tech employees were let go in May, and over 7,000 have lost their jobs so far in June, a clear sign that that industry is going through a rough patch
Kraken CEO Jesse Powell sparked a corporate culture war at his company after he reportedly asked who can use the “N-word” and said women were “brainwashed.” The New York Times spoke with multiple unnamed employees who said Powell had created a “hateful workplace” and was hurting their mental health. While the NYT claims that “dozens” of employees were planning on leaving, in a Twitter thread Powell revealed that only 20 of Kraken’s 3,200 employees had accepted its offer of voluntary severance. In the thread, which was praised by Tesla CEO Elon Musk, Powell criticized Silicon Valley’s definition of diversity. Earlier this month, Kraken published a blog post outlining the company’s culture. Kraken said it will prioritize diversity of thought over physical characteristics.
The problem with corporate culture wars is that it creates a lose-lose situation for all employees. Using Kraken as an example, if you’re someone who agrees with Powell’s definition of diversity, while you might be happy that you and the CEO are on the same page, having to deal with your “woke” co-workers, who disagree with you, can create a toxic work environment.
If you’re an employee that understandably disagrees with Powell’s comments, you’re also going to be angry as the two of you have completely opposite definitions of right and wrong. As a result it’s possible your belief and commitment to the company’s mission could start to waver.
A decentralized team ensures that employees can continue to collaborate despite their different beliefs on sensitive social and political issues. Decentralization can lower the possibility of creating a toxic work environment, and ensure employees remain happy, productive and committed to the company’s mission.
For many people, working at a centralized company is an attractive proposition as they have a safe job that provides them with a healthy salary and benefits. However, the reality is that even centralized companies can ruthlessly lay off their workers, as was the case in Dec. 2021, when the CEO of digital mortgage company Better.com Vishal Garg laid off 900 workers via Zoom just three weeks before Christmas. Garg accused some of the workers of “stealing” by only working two hours a day. Political differences can also create a toxic work environment. A survey released just weeks after the 2020 Presidential election found that 67% of respondents wanted to change their jobs because of their colleagues' political views.
Web2 has failed to decentralize power. Gig economy companies like Uber make billions while their drivers earn less than minimum wage. Social media platforms such as Facebook use user data to generate billions in revenue while promoting misinformation.
The web3 ecosystem must implement democratic systems of governance that empower all members. So far, web3 has failed to do so with one example being the fact that several play-to-earn games have dual-token systems that enable participants to generate income but fail to reward them with governance power. This is akin to how many workers receive a salary from their company but lack an equity stake.
Important principles to ensure web3 creates a fair environment:
Currently, web3 governance structures resemble plutocracies as they have implemented token-weighted voting.
Governance structures to overcome plutocracy:
In order to adhere to one of its core beliefs that there are other ways to add value beyond money, web3 must ensure power and compensation are earned via merit and contributions, rather than the ability to write a check.
Web3 must implement initiatives that benefit the least well-off.
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