Crypto Exchange Kraken Cuts Global Workforce by 30%

Kraken, one of the longest running cryptocurrency exchanges, has shed its global workforce by 30%, firing approximately 1,100 people “in order to adapt to current market conditions.”

The action, which the United States-based crypto exchange announced on Wednesday, comes at a time when some crypto firms based in the country are undergoing bankruptcy proceedings. These include Chicago-based FTX.US, the US subsidiary of beleaguered FTX, and New Jersey-based crypto lenders BlockFi and Celsius Network.

However, Kraken attributed the move to “negative influences on the financial markets.” The exchange explained that it had tripled its workforce during the crypto market boom in the past. However, with the market downturn in recent times, it had no other “preferable options” to bring down its operational cost.

“Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This resulted in significantly lower trading volumes and fewer client sign-ups. We responded by slowing hiring efforts and avoiding large marketing commitments,” Jesse Powell, Kraken’s Co-Founder and CEO explained in the statement.

Additionally, Powell noted that the action, which returns the exchange’s workforce back to its size only 12 months ago, will enable the exchange “to sustain the business for the long-term.” It will also enable Kraken to continue “to build world-class products and services in selective areas that add the most value for our clients.”

Recent Mass Layoffs

Kraken's action is a continuation of the mass retrenchment in the crypto industry that started some months ago. The crypto firms that laid off significant portions of their teams have all cited rising market volatility.

In June, New York-based Gemini cut its workforce by 10%, Coinbase by 18%, and now-bankrupt BlockFi by 20%. Crypto.com, a Singapore-based crypto exchange, also pruned its workforce by 5% or 260 workers.

On the contrary, leading crypto exchange Binance announced some months back that it was undergoing talent recruitment for 2,000 open job positions. Moreover, Seychelles-based crypto exchange KuCoin previously clarified that it had no plans to make any significant changes to its hiring plan for this year.

In a recent interview with Finance Magnates, Dr Christopher Smithmyer, an Adjunct Professor at Doane University, a private university in Nebraska, blamed the crypto exchanges for not saving for rainy days. Smithmyer, who is the author of the Dragons of the Digital Age, also believes that a crypto winter is a good way to test the crypto market to tease out poor and weak performers.