Kraken Lets Go of 1,100 Employees Due to Market Conditions
- San Francisco-based crypto exchange Kraken has confirmed that it is laying off 1,100 employees, which amounts to roughly 30% of its headcount, “in order to adapt to current market conditions.”
- Kraken stated that the exchange had seen a huge surge in the demand for its services in the past few years and it tripled its headcount in a short period. It aims to revert to its 2021 employee count.
- The worsening macroeconomic conditions “resulted in significantly lower trading volumes and fewer client sign-ups.” As a result, the exchange slowed hiring efforts and avoided large marketing commitments.”
Major crypto exchange Kraken has confirmed that it is laying off 1,100 employees, which amounts to roughly 30% of its headcount, “in order to adapt to current market conditions,” as per a statement given by co-founder and CEO Jesse Powell. In a publicly available post, the executive described why the decision has been taken and what that could mean for the future of the exchange.
The blog post, which was made public on Wednesday, Kraken stated that the exchange had seen a huge surge in the demand for its services in the past few years as millions of users came to the platform with their investments. The growing demand led to the crypto exchange almost tripling its headcount over the past few years which further led to many more investors joining the platform.
However, the exchange stated in the post that it grew too quickly and now, the drying trading volumes and the lack of bullish momentum in the crypto space, the customers are moving away. Therefore, the firm is letting go of 30% of workforce which puts its headcount to where it was 12 months ago, i.e., in the 2021 bull run.
“We are extremely grateful for the contributions of those impacted by today’s announcement and we’ll do our best to help them transition to their next opportunity. All impacted Krakenites have been notified as of this morning,” said Kraken in the blog post.
Kraken noted in the blog post that since the beginning of the year 2022, “macroeconomic and geopolitical factors have weighed on financial markets” which has led to a decrease in the bullish sentiment previaling in these markets. Investors are looking for safer investments due to fears of a financial recession.
According to the United States-based crypto exchange, the worsening macroeconomic conditions “resulted in significantly lower trading volumes and fewer client sign-ups.” Kraken responded by “slowing hiring efforts and avoiding large marketing commitments.”
The blog post noted that negative influences on the financial markets have continued and therefore, Kraken has exhausted preferable options for “bringing costs in line with demand.”
Kraken, one of the oldest exchanges around and has been operating successfully since 2011, will offer 16 weeks of base pay for all departing employees along with performance bonuses and 4 months of healthcare continuation coverage inclusive of the paid leave period. Dedicated visa and immigration support will also be provided along with career support.
“I remain extremely bullish on crypto and Kraken,” Powell added.
Kraken recently ended its war with OFAC regarding the evasion of sanctions on Iran-based people by the US. The exchange is set to pay a hefty amount of $362k and “invest” $100,000 in some additional sanctions compliance controls, along with training its staff and implementing technical controls to assist in sanctions detection. Interestingly, the exchange was also granted a license to operate in Abu Dhabi.