Kraken, the second biggest cryptocurrency exchange in the United States, has stated that it would lay off almost 30% of its workforce, or 1,100 employees.

Jesse Powell, the co-founder of Kraken, made the news on Wednesday. Powell highlighted macroeconomic and geopolitical issues as weighing on financial markets and noted that the company’s downsizing decision is a correction of growth from the previous year when crypto values hit all-time highs, and the industry’s prospects were considerably better than they are now.

Lower trading volumes and a fall in client sign-ups under uncertain market circumstances, according to Cointelegraph, have contributed to the company’s decision to cut down on spending by slowing down its recruiting efforts to avoid making huge marketing commitments.

Kraken has said that employees who are let off would get a fair severance package that includes separation pay for 16 weeks of basic pay, performance incentives, and four months of healthcare coverage that includes

• counseling,
• immigration help, and
• career support.

Rough day at @krakenfx. Headcount rolled back 12 mos. Macro was already tough and we held out but recent industry woes diminished near-term optimism about a crypto rebound. Better positioned now. Glad we were able to take good care of our former colleagues. Been a privilege. https://t.co/xfwShapS2N

— Jesse Powell (@jespow) November 30, 2022

Kraken’s plan to shrink follows the bankruptcy of FTX earlier this month. The company’s reduction efforts are also a full 180-degree turn from when it stated in mid-June that it was trying to fill 500 jobs in a worldwide recruiting campaign.

Jesse Powell, the company’s CEO, announced his resignation and that COO Dave Ripley would take over. On the other hand, Powell signed off on the downsizing statement as CEO and founder.

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