Kraken is the latest cryptocurrency exchange that’s been forced to downsize in the face of macroeconomic headwinds and a devastating crypto bear market.
- According to an announcement from the firm on Wednesday, leadership has been forced to slash 30% of its workforce, amounting to 1100 workers.
- The reduction in size takes Kraken’s headcount back to where it was 12 months ago. The firm said it was forced to grow fast over the past few years to keep up with client demand.
- However, 2022 has introduced “macroeconomic and geopolitical factors” that had a major effect on the exchange’s business, alongside financial markets across the board. This led to far lower trading volumes, and fewer new clients.
“We responded by slowing hiring efforts and avoiding large marketing commitments,” explained the company. “Unfortunately, negative influences on the financial markets have continued and we have exhausted preferable options for bringing costs in line with demand.”
- Macroeconomic pressures have been led by the Federal Reserve, which has quickly hiked interest rates throughout late 2022 in an attempt to reign in red-hot inflation.
- Numerous parties from the United Nations to Elon Musk have warned the central bank that its actions may cause a major global recession.
- Nevertheless, Federal Reserve chairman Jerome Powell has warned of future rate hikes to come, which may last longer than he anticipated back in September.
- Despite the pressures, Kraken promised that the recent changes will allow it to remain active for the long term.
“Macro was already tough and we held out but recent industry woes diminished near-term optimism about a crypto rebound,” elaborated Jesse Powell – founder and CEO of Kraken – on Twitter. “Better positioned now. Glad we were able to take good care of our former colleagues.”