According to its CEO, the exchange grew too quickly to accommodate the fast-growing crypto ecosystem.
Cryptocurrency exchange Kraken announced on Nov. 30 that it has made one of its “hardest decisions” and is cutting down its global workforce by approximately 1,100 people, comprising approximately 30% of its total workforce, amid current market conditions.
According to CEO and co-founder Jesse Powell, Kraken had to triple its workforce due to the fast-growing crypto ecosystem, and the current pullback takes the size of the company’s team back to where it was 12 months ago. Powell shared in a tweet, "Macro was already tough and we held out but recent industry woes diminished near-term optimism about a crypto rebound."
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
Lower trading volumes and fewer client sign-ups amid turbulent market conditions have contributed to Kraken’s decision to cut down its expenses by slowing down hiring efforts and avoiding large marketing commitments.
According to the exchange, these changes are necessary “to sustain the business for the long-term while continuing to build world-class products and services in selective areas that add the most value for our clients.”
The company stated that employees being let go were given a decent severance package, which includes separation pay covering 16 weeks of base pay, performance bonuses, four months of healthcare coverage including counseling, immigration support and career support, among other benefits.
Earlier this year in June, Kraken announced that it would continue to hire over 500 roles in various departments amid a market downturn. The company's hiring efforts were at the time in stark contrast to major layoff announcements from major blockchain firms such as Coinbase and BlockFi.
In support of the decision to continue to expand its staff earlier in the year, Kraken had said:
“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."
Current layoffs, however, show a contrasting picture from the CEO's statements made in June, when he took the opportunity to throw shots at supposed “woke activists" while discussing the company's decision to hire hundreds of new employees.