Kraken Cuts 30% Of Its Workforce, Citing Bearish Market Conditions

Kraken, one of the world’s largest cryptocurrency exchanges, has become the latest company in the industry to conduct a mass layoff.

Adjusting to Macroeconomic Conditions 

Earlier this week, the San Francisco-based exchange announced that it had slashed its workforce by 30%, laying off about 1,100 employees as it hopes to extend its runway and weather the bear market.

The exchange explained that the decision was difficult but necessary as it hopes to become leaner and focus better on its core operations going forward. 

As co-founder and outgoing chief executive Jesse Powell explained, macroeconomic and political tensions have continued to weigh on the crypto space.

Powell added that Kraken had been proactive in its approach and had slowed down hiring long before now while also avoiding massive marketing commitments. However, as the bear market shows no signs of abating, layoffs appear to be the next phase of its recovery.

The CEO also added that the layoffs would effectively reduce Kraken’s workforce to the levels it was a year ago. The exchange had commenced a massive hiring spree when it noticed the bill market and is simply adjusting to the current market conditions.

Bear Market Claims Another Victim 

The current workforce slash marks a significant change from Kraken’s stance from the middle of the year. At the point when the crypto market appeared to be reeling from the crash of the Terra stablecoin exosystem, companies in the space had already started adjusting their operations to deal with the market conditions. However, Kraken was defiant, even going as far as announcing additions to its employee count.

In a blog post at the time, the exchange explained that it had learned from previous market downturns and was properly prepared for what was coming. With a knowledge of the bear market’s propensity for weeding hype seekers from serious industry players, Kraken claimed that it was willing to build for the long term and was financially capable of weathering the storm.
Kraken pointed out that it wasn’t planning any layoffs and would instead fill as many as 500 job openings before the year. Sadly, it appears that the entire market condition has become too untenable to continue with these plans.

The layoffs are another example of a crypto company adjusting its workforce to deal with the current market conditions. Coinbase, Crypto.com, and other notable names in the industry have adjusted their headcounts to maintain or extend their runways as the market decline continued to rage longer. 

Of course, it is worth noting that Kraken’s expanses have extended beyond just normal outlays and regular company costs. The company also recently had to make restitutions after being flagged by the Treasury Department for violating economic sanctions against Iran.

According to the Treasury Department, Kraken had processed transactions with Iranians over 800 times during a period when the country has been under heavy sanctions from both the U’S government and the international community. 

As such, the exchange was compelled to pay about $363,000 in fines. Although the company didn’t particularly admit any wrongdoing, the fine payment must have affected it.