Kraken Lays Off 30% of Staff as Bitcoin Bear Market Persists
by James · November 30, 2022
Mass layoffs continue to plague the crypto industry. San Francisco-based crypto exchange Kraken announced today that it is cutting approximately 1,100 employees, reducing its workforce by 30%.
In a blog mailKraken founder and outgoing CEO Jesse Powell shared his reasoning behind the latest wave of layoffs, citing broader economic concerns and a crypto bear market that has yet to see relief.
“Since the start of this year, macroeconomic and geopolitical factors have weighed on the financial markets. This resulted in significantly lower trading volume and fewer customer registrations,” Powell wrote. “We responded by slowing hiring and avoiding major marketing commitments. Unfortunately, negative impacts on the financial markets have continued and we have used the preferred options to bring costs in line with demand.”
The redundancies bring the stock exchange’s total number of employees down from approx. 3,667 to 2,567 employees. Powell said Kraken has now returned to the same number of employees it had about a year ago, and had expanded by 30% as Kraken saw “millions of new customers” during the bull market.
The bear market has claimed several victims in the crypto space this year following the collapse of Terra in May. Bitcoin is currently trading at around $16,000, down about 75% from its peak of $69,000 in November 2021. Kraken claimed in a blog post in June that it would not adjust its hiring plans and would add 500 jobs by the end of the year.
Instead, Kraken will now give departing employees 16 weeks of severance pay, performance bonuses for some, four months of post-departure healthcare and other benefits.
“I am confident that the steps we are taking today will ensure that we can continue to deliver on our mission that the world needs now more than ever before,” Powell said of the company’s decision. “I remain extremely bullish on crypto and Kraken.”
But Kraken’s expenses extend beyond the standard bear market challenges. Earlier this week, it reached a settlement with the US Treasury Department for allegedly violating US sanctions against Iran. The Ministry of Finance said Kraken processed 826 transactions that violated the sanctions. As a result of the settlement, Kraken has agreed to pay $362,158.70 in fines.
“Kraken is pleased to have resolved this matter, which we discovered, voluntarily self-reported and promptly remedied,” Kraken legal director Marco Santori said previously. Decrypt by e-mail.
