London November 30 2022: The crypto exchange Kraken is laying off 30% of its workforce, or about 1,100 people, as the fallout from this year’s digit-asset market meltdown worsens.
The job eliminations at the world’s third-biggest crypto exchange by daily trading volume follows similar moves by rivals including Coinbase Global Inc. and Gemini. Many exchanges have seen revenue slump as trading activity fell off in recent months with crypto prices plunging. The recent collapse of the crypto exchange FTX added to market uncertainty.
“Unfortunately, negative influences on the financial markets have continued and we have exhausted preferable options for bringing costs in line with demand,” the company said in a blog post Wednesday.
Kraken had recently expanded quickly, and the cuts will return its workforce to where it was a year ago, according to the blog.
“Mostly it’s an obvious follow on to declines in crypto trading volumes,” said Aaron Brown, a crypto investor who writes for Bloomberg Opinion. “There’s also the near-universal tendency of tech firms to over-staff in good times, leading to the need for large layoffs in bad times.”
The layoffs come just days after Kraken agreed to pay more than $362,000 in a settlement with the Treasury Department for violating sanctions with Iran. It also comes about two months after its controversial co-founder Jesse Powell announced he’ll be stepping down as its chief executive officer.
