Crypto Winter Casualties Continue: Kraken To Lay Off Over 1,000 Employees

Kraken, the world’s third-largest exchange by trading volume, announced cutting off its workforce by 30% to deal with current market conditions. Specifically, the San-Francisco based company has reduced its staff by 1,100 employees.

When the crypto market was already facing long-lasting winter, the FTX fiasco added fuel to the fire by pulling down the Bitcoin price to a two-year low. Though the crypto exchange’s fall led global authorities to tighten regulations and start probes in various platforms, lower crypto prices also pushed cryptocurrency companies to cut their staff to survive in the bear market. 

Jesse Powell, Kraken co-founder and CEO, explained in a blog post that the platform had tripled its workforce during the previous bull market to offer its users a seamless experience. But, unfortunately, the market pullback pushed the company to bring its headcount back to where it was 12 months ago. 

The CEO added; 

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.

Kraken Cuts Its Workforce To Sustain Business In Long-term

Lower crypto prices and the US Federal Reserve’s move to tighten regulations have made global investors get rid of risky assets at a time when the major crypto companies are filing for bankruptcy. Similarly, it lowered the trading volume at Kraken and the number of new sign-ups. Before deciding to cut its employee headcount, the exchange limited the hiring and skipped large marketing commitments to fight the bear market.

Kraken claimed a few months ago that the platform plans to hire 500 new employees in the bear market to have experienced labor for its crypto-first culture. Other companies, at the time, were cutting their staff on the other hand. But seemingly, things change as the events turn.

Kraken noted at the time; 

We have not adjusted our hiring plan, and we do not intend to make any layoffs. We have over 500 roles to fill during the remainder of the year and believe bear markets are fantastic at weeding out the applicants chasing hype from the true believers in our mission.

Kraken added that it was the only option remaining through which the platform could practically sustain the business for the long term. In addition, it will be able to build “world-class products and services in selective areas that add the most value for our clients.”

Job cuts by Kraken coincide with other crypto companies that laid off their staff this month due to the bear market. They include Coinbase, which reduced 60 positions, and Unchained Capital, which split ways with 600 team members.

Featured image from Pixabay and chart from TradingView.com