Kraken, a cryptocurrency exchange, announced plans to cut its workforce by about 1,100 people, or 30%, shrinking to the size it was a year ago.
Co-founder and CEO Jesse Powell said the company has struggled to rein in costs amid the “crypto winter” that has choked off trading volumes and new client signups.
Kraken initially responded by slowing hiring and avoiding large marketing commitments, but as the negative influences on the financial markets continued this year, “we have exhausted preferable options for bringing costs in line with demand,” Powell said in a note to employees.
Cryptocurrency exchanges have faced increased regulatory scrutiny and a “mass exodus” of customers after the second-largest exchange FTX filed for bankruptcy this month, leaving more than one million creditors on the hook, and several hundred employees out of jobs.
Barry Silbert’s Digital Currency Group shed about 13% of its staff this month, and Crypto.com laid off 2,000 employees in October, CNBC reported.
Powell said Kraken, founded in 2011, is one of the longest running global crypto exchanges. He said it has “successfully navigated many market cycles and our strategy has always included thoughtful cost management and spending,” allowing the company to sustain its business for the long-term.
“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,” he said. “I remain extremely bullish on crypto and Kraken.”
Kraken, which shares the name of the mythical sea creature that terrorizes sailors, considered going public in early 2020.
Powell said “departing Krakenites” will receive 16 weeks of severance, four months of healthcare coverage, job search help, and access to counseling services. Those eligible will also receive bonuses and vested stock options, and those on company-sponsored visas will get visa and immigration support.
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