Crypto exchange Kraken today announced it’s letting go of 1,100 staffers. The announcement came from a company blog post and follows similar news from DoorDash that it was also cutting staff.
News that Kraken is cutting staff — and therefore costs — is not a surprise, given a generally gloomy macroeconomic climate and even worse climes in crypto land. Prior to the Kraken news, we’ve seen several high-profile implosions in and amongst web3 companies, and layoffs from other exchanges including the American crypto giant Coinbase earlier in the year.
Per Kraken, the 1,100 affected employees represent around 30% of its staff, making them stiffer than most cuts we’ve seen from tech companies this year, reductions that tended to land in the 10% to 20% range.
The exchange explained why it made the cuts, writing that “significantly lower trading volumes and fewer client sign-ups” this year led it to reduce its hiring pace and avoid “large marketing commitments.” However, continuing “negative influences on the financial markets,” according to Kraken, made the cuts necessary despite its attempts to cut other expenses before laying off staff.
DoorDash cited “macro” impacts that led to it make cuts, striking a related tenor concerning the market it is confronting today.
Layoffs have become commonplace in the technology market this year. From startups to tech giants, many tech companies have looked to trim their costs in response to slower than anticipated growth, or the need to reduce unprofitability as investor sentiment has evolved; last year’s growth at all costs mantra has run head-first into market expectations for cleaner P&L statements this year.
After a slight slowdown, tech layoffs have picked back up. The crypto market has seen a sharper contraction this year than the technology market more generally, making the Kraken cuts not a surprise, even if they constitute a greater portion of the company’s overall workforce than we have seen amongst other companies.
Coinbase and Kraken are not alone in reducing their personnel costs. OpenSea, another company that saw its valuation soar during the 2021-era startup and crypto boom, was forced to cut its headcount as well.