Kraken co-founder and CEO Jesse Powell explained in a blog that his company tripled its workforce over the last 12 months as hundreds of millions of new users had entered the crypto space. A quick scaling up was needed on the part of the exchange to cater to its new users.
But since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets, resulting in significantly lower trading volumes and fewer client sign-ups, Powell added.
The exchange responded by slowing hiring efforts and avoiding significant marketing commitments. However, negative influences on the financial markets have continued and exhausted preferable options for bringing costs in line with demand.
“These changes will allow us 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,” Powell stated.
Kraken will extend the affected employees' vesting window and provide 16 weeks of compensation as severance.
Crypto Companies Have Been Battered
Following the collapse of FTX, withdrawals and regulatory scrutiny have battered cryptocurrency exchanges.
- On Nov. 28, Sam Bankman-Fried's crypto exchange, FTX, filed for bankruptcy. As part of the restructuring, several hundred employees have been let go.
- About 13% of Barry Silbert's Digital Currency Group employees were let go in November.
- In October, 2,000 employees of Crypto.com were let go.