Dispirited macroeconomic conditions have forced yet another tech company, Kraken, to shed 30% of its workforce. The crypto exchange is laying off 1,100 employees “in order to adapt to current market conditions.â€
Kraken’s co-founder and CEO Jesse Powell said the company’s decision to shed 30% of its workforce means they are scaling down to the number of employees the company had 12 months ago. In June 2022, the company said it would hire 500 people who were “crypto first.â€
Founded in 2011, Kraken went through a period of high growth in the past five years due to a renewed interest in cryptocurrency. However, virtual currencies have been on a downward spiral for at least a year.
“Over the past few years, hundreds of millions of new users entered the crypto space and millions of new clients put their trust in Kraken during that time. We had to grow fast, more than tripling our workforce in order to provide those clients with the quality and service they expect of us,†the crypto trading and exchange platform said.
“Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This resulted in significantly lower trading volumes and fewer client sign-ups. We responded by slowing hiring efforts and avoiding large marketing commitments. Unfortunately, negative influences on the financial markets have continued and we have exhausted preferable options for bringing costs in line with demand.â€
See More: From the Great Resignation to the Great Layoff: What Ails the Tech Industry?
Layoffs at Kraken follow Coinbase’s decision to cut its workforce by 18% (also 1,100) in June 2022 and, more recently, layoffs of over 600 or 18% of Unchained Capital employees, 13% of Digital Currency Group workers, and 2,000 of 40% of Crypto.com employees, the FTX crisis and declaration of bankruptcy by BlockFi.
Bitpanda and Banxa also laid off around 30%Opens a new window (270 employees and 70 employees, respectively), while BitOasis let go of an unknown number of employees.
Economic turmoil has also led to Bitcoin dropping to a two-and-a-half-year low of ~17,000, down over 65% year-to-date.
Kraken, which settled with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) late in November 2022 by paying $362,158.70 for violating sanctions against Iran, will pay 16 weeks of base pay, bonus, four weeks of healthcare, visa and immigration support, and more.
Commenting on the layoffs, Powell said, “I’m confident the steps we are taking today will ensure we can continue to deliver on our mission which the world needs now more than ever before. I remain extremely bullish on crypto and Kraken.â€
Let us know if you enjoyed reading this news on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We would love to hear from you!
Image source: Shutterstock