The cryptocurrency exchange Kraken said today that it is firing 1,100 people. The news came from a company blog post, and it came after DoorDash also said it was letting people go.
Given that the economy as a whole is in bad shape and crypto-land is even worse, it’s not a surprise that Kraken is cutting staff and, by extension, costs. Before the news about Kraken, there have been a number of high-profile collapses of web3 companies and layoffs from other exchanges, including the American crypto giant Coinbase earlier this year.
Kraken says that the 1,100 people who will be affected make up about 30% of its staff. This makes the cuts harder than most we’ve seen from tech companies this year, which have been between 10% and 20%.
The exchange wrote that “significantly lower trading volumes and fewer client sign-ups” this year caused it to slow down on hiring and avoid making “large marketing commitments.” Kraken said that the cuts were necessary because “negative influences on the financial markets” kept happening, even though the company tried to cut other costs before laying off staff.
DoorDash said that “macro” factors caused it to make cuts, which is a similar way of talking about the market it is facing right now.
This year, layoffs have become common in the tech market. Many tech companies, from startups to tech giants, have tried to cut costs in response to slower-than-expected growth or the need to reduce unprofitability. This is because investor sentiment had changed since last year when the mantra was “growth at all costs.” This year, the market wants to see cleaner P&L statements.
After a brief lull, tech layoffs are back on the rise. This year, the crypto market has shrunk more than the technology market as a whole. This is why the Kraken layoffs don’t come as a surprise, even though they affect a larger share of the company’s employees than we’ve seen at other companies.
Coinbase and Kraken are not the only ones trying to cut down on their staff costs. OpenSea, another company whose value went up during the startup and cryptocurrency boom of the early 2020s, also had to lay off people.