Kraken Cuts 30% of Its Workforce to Survive Crypto Winter

The second largest crypto exchange in the U.S., Kraken, has announced that it is laying off around 30%, or 1,100 members of its staff.

The announcement was made on Wednesday by Kraken co-founder Jesse Powell. Powell cited “macroeconomic and geopolitical factors have weighed on financial markets,” and added that the company’s downsizing move is a correction of growth from the year prior when crypto prices reached all-time highs and the prospects for the industry appeared much brighter than the state they are in today.

Rough day at @krakenfx. Headcount rolled back 12 mos. Macro was already tough and we held out but recent industry woes diminished near-term optimism about a crypto rebound. Better positioned now. Glad we were able to take good care of our former colleagues. Been a privilege. 🙇‍♂️ https://t.co/xfwShapS2N

— Jesse Powell (@jespow) November 30, 2022

Powell said:

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. This reduction takes our team size back to where it was only 12 months ago.

According to reports by Cointelegraph, lower trading volumes and a decline in customer sign-ups amid the turbulent market conditions have contributed to the company’s decision to cut down on expended by slowing down its hiring efforts to avoid making large marketing commitments.

Kraken has said that staff being let go will be awarded a decent severance package including separation pay for 16 weeks of base pay, performance bonuses, and four months of healthcare coverage including counseling, immigration support, and career support.

Kraken’s decision to downsize comes amid the fallout of FTX’s collapse earlier this month. The company’s downsizing efforts are also a complete redirection from when the company announced that it was looking to fill 500 positions in a global hiring push in mid-June. Company CEO, Jesse Powell, announced that he was stepping down from his role and COO Dave Ripley would take on the role. Powell however signed the downsizing announcement as CEO and founder.

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