Mass layoffs continue to plague the crypto industry. San Francisco-based crypto exchange Kraken today announced that it is cutting roughly 1,100 employees, reducing its headcount by 30%.
In a blog post, Kraken founder and outgoing CEO Jesse Powell shared his reasoning behind the most recent wave of layoffs, citing broader economic concerns and a crypto bear market that’s yet to see relief.
“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,” Powell wrote. “We responded by slowing hiring efforts and avoiding large marketing commitments. Unfortunately, negative influences on the financial markets have continued and we have exhausted preferable options for bringing costs in line with demand.”
The layoffs bring the exchange’s total headcount down from about 3,667 to 2,567 employees. Powell said that Kraken has now returned to the same number of staff it had about a year ago, and had expanded by 30% when Kraken saw “millions of new clients” during the bull market.
The bear market has claimed several victims in the crypto space this year following the collapse of Terra in May. Bitcoin is currently trading for around $16,000, down roughly 75% from its all-time high of $69,000 in November 2021. Kraken claimed in a blog post in June that it would not be adjusting hiring plans and would add 500 jobs by the end of year.
Instead, Kraken will now be giving departing employees 16 weeks of severance pay, performance bonuses to some, four months of healthcare post-departure, and other benefits.
“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 of the company’s decision. “I remain extremely bullish on crypto and Kraken.”
But Kraken’s expenses extend beyond the standard run-of-the-mill bear market challenges. Earlier this week, it reached a settlement with the U.S. Treasury for allegedely violating U.S. sanctions against Iran. The Treasury said Kraken processed 826 transactions that violated the sanctions. As a result of the settlement, Kraken has agreed to pay $362,158.70 in fines.
“Kraken is pleased to have resolved this matter, which we discovered, voluntarily self-reported, and swiftly corrected,” Kraken's Chief Legal Officer Marco Santori previously told Decrypt via email.