Kraken cuts 1,100 workers in 'crypto winter'
The layoffs are part of cost-cutting measures
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Cryptocurrency exchange Kraken on Wednesday announced it is cutting its workforce by 30% as part of efforts to weather what it called a "crypto winter."
That means roughly 1,100 Kraken employees will lose their jobs, bringing the company’s headcount back to what it was about a year ago, according to a business update from CEO Jesse Powell published on the company’s website. Kraken is doing the layoffs "in order to adapt to current market conditions," he said.
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"Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets," Powell stated. "This resulted in significantly lower trading volumes and fewer client sign-ups. We responded by slowing hiring efforts and avoiding large marketing commitments."
Cryptocurrency mixing platform, Tornado Cash, has been hit with US sanctions over allegations of money laundering. Cryptocurrency Illistration picture taken on Jan. 24, 2022. (REUTERS/Dado Ruvic/Illustration / Reuters)
"Unfortunately, negative influences on the financial markets have continued, and we have exhausted preferable options for bringing costs in line with demand."
Kraken employees affected by the round of layoffs received notification Monday. The crypto exchange said it is providing them with "comprehensive support," including 16 weeks of separation pay and four months of healthcare coverage.
Representations of cryptocurrencies plunge into water in this illustration taken, May 23, 2022. (REUTERS/Dado Ruvic/Illustration/File Photo / Reuters Photos)
Crytpocurrency prices were mixed early Monday morning. (Photo Illustration by Chesnot/Getty Images) (Photo Illustration by Chesnot/Getty Images / Getty Images)
Laid-off employees will also have an extended window to exercise vested stock options and access to career support. Those on company-sponsored visas will get immigration support as well, Kraken said.
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"I’m confident the steps we are taking today will ensure we can continue to deliver on our mission which the world needs now more than ever before," Powell said. "I remain extremely bullish on crypto and Kraken."
The prices of some popular cryptocurrencies have dropped significantly year-to-date. Bitcoin is currently down over 71%, while Ethereum and Cardano have fallen over 72% and 80% respectively.