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Crypto Exchange Kraken Cuts 1,100 Jobs To 'Weather Crypto Winter' (kraken.com) 72

Posted by msmash from the crypto-winter dept.
Crypto exchange Kraken writing in a blog post: Today we're announcing one of the hardest decisions at Kraken to date. We're reducing our global workforce by approximately 1,100 people, or 30 percent, in order to adapt to current market conditions. We are extremely grateful for the contributions of those impacted by today's announcement and we'll do our best to help them transition to their next opportunity. All impacted Krakenites have been notified as of this morning. Over the past few years, hundreds of millions of new users entered the crypto space and millions of new clients put their trust in Kraken during that time. We had to grow fast, more than tripling our workforce in order to provide those clients with the quality and service they expect of us. This reduction takes our team size back to where it was only 12 months ago.

Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This resulted in significantly lower trading volumes and fewer client sign-ups. We responded by slowing hiring efforts and avoiding large marketing commitments. Unfortunately, negative influences on the financial markets have continued and we have exhausted preferable options for bringing costs in line with demand. As one of the longest running global crypto exchanges, founded in 2011, we have successfully navigated many market cycles and our strategy has always included thoughtful cost management and spending. These changes will allow us to sustain the business for the long-term while continuing to build world-class products and services in selective areas that add the most value for our clients.
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Crypto Exchange Kraken Cuts 1,100 Jobs To 'Weather Crypto Winter' More

Crypto Exchange Kraken Cuts 1,100 Jobs To 'Weather Crypto Winter'

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  • Dinosaurs cut ranks... (Score:5, Funny)

    by AmazingRuss ( 555076 ) on Wednesday November 30, 2022 @12:42PM (#63091020)
    ... to weather asteroid induced winter.

  • Not a "winter" (Score:5, Insightful)

    by swillden ( 191260 ) <shawn-ds@willden.org> on Wednesday November 30, 2022 @12:43PM (#63091028) Journal

    I don't think this is a crypto "winter", more like a crypto ice age heading into a permanent crypto snowball Earth. I think people are finally realizing that cryptocurrencies are lousy as currencies and meaningless as "assets".

    But maybe I'm engaging in wishful thinking. And maybe tulips will come back, too.

    • From HODL to HOTH!

    • Re: (Score:1)

      by JeffSh ( 71237 )

      why do you consider it wishful thinking? im confused about why a person would wish for ultimate failure of a free independant store of value currency. maybe you're talking only about all of the altcoins, and the ecosystem around them that has been bad. i hope you are not including bitcoin in your wishful thinking. bitcoin is an asset that offers significant value as a globally transferrable digital asset, when married with lightning network it scales past visa's transaction capabilities and speed. there has

      • No one here wants to buy you out. You're gonna have to eat shit.

      • im confused about why a person would wish for ultimate failure of a free independant

        I think we all just got tired of the crypto bullshit being shoved at us by bros. After years of articles and spam its just more tired old sales and marketing scams, or so my Nigerian Prince told me. People are not getting any smarter over time.

      • why do you consider it wishful thinking?

        Because cryptocurrencies, at least all of them yet invented, are a bad idea. I never realized how brilliant our current fiat currency systems were until I started looking hard at cryptocurrencies. Perhaps some efficient (perhaps PoS?) cryptocurrency may be invented, one that provides all of the features needed to be useful as a currency, but it hasn't happened yet. Realistically, I think something like Chaum's old Digicash proposal, which isn't a new currency but just an alternative electronic representatio

        • Re: (Score:2)

          by JeffSh ( 71237 )

          if you hate bitcoin its because you think its not just indifferent but actively malevolent, and with this i would strongly disagree. most people are convinced bitcoins proof of work is the source of its malevolence, but this is pure FUD. bitcoin uses energy to secure itself. any use of fossil fuels to that end is the cause of bad regulatory regimes which make fossil fuels cheaper than they should be. bitcoin exposes this and incentivizes a regulatory correction. moreover, bitcoin again offers a revenue sour

          • Yep. I think it's actively harmful, even aside from the PoW issue (which is also bad). I explained somewhat here: https://slashdot.org/comments.... [slashdot.org]

            bitcoin again offers a revenue source for off peak or low value energy sources that are valuable for energy production for human uses, but benefit from a source of revenue to pay for off peak or low value power.

            Yes, I've seen this theory. I have seen no evidence that it happens in practice.

            • Re: (Score:2)

              by JeffSh ( 71237 )

              do you think its possible you have an observation bias? if you hate the space as much as you say you do, it seems like you may also have an information selection blind spot.

              https://www.cnbc.com/2022/02/1... [cnbc.com]

              https://www.gigaenergy.com/ [gigaenergy.com]

              i think that this is an ever evolving space, and this crypto winter will last a few years, as things are torn down and rebuilt again, with better foundations. this company is just one example of many. people mine bitcoin from excess solar energy and tons of other examples.

              https: [freedomsolarpower.com]

              • "Excess solar energy" strikes me as a dodge. All you can say then is that a particular block of mining was done without an additional fossil fuel burden. At best, net neutral.

                But that's not right either, if that solar could have found its way to the grid. Then the notion of neutrality is gone, and it participates in the cumulative consumption curve like everybody else.

              • You know that "giga" company you liked to are using "stranded gas", right? As in, gas that can't get to market and therefore stays unused. How is using that for mining anything other than good old fossil fuel consuption?

          • Using lower cost electricity supplies only makes the situation less bad. It does not make it a positive win. Proof of work is just burning energy. At least hosting an Amazon server farm creates some clear value to customers.

            Also, such incentives encourage bad behavior. China went big into crypto mining for various reasons, a significant factor was that well-connected generals could arrange sales of cheap electricity from coal-fired plants to business partners at attractive wholesale prices.

          • Re: (Score:2)

            by gweihir ( 88907 )

            It is actively harmful. For example, the massive economic damage from ransomware would not even be possible without crapcoins allowing hard to trace money laundering. The "mining" does significant ecological damage. And all the assholes fawning over it get on everybody else's nerves and waste their time.

            If that is not "actively harmful", I do not know what is.

            Also, stop regurgitating boilerplate crap about how great and smart and nice crapcoins are. The lies get tiresome.

        • Re: (Score:2)

          by gweihir ( 88907 )

          Realistically, I think something like Chaum's old Digicash proposal, which isn't a new currency but just an alternative electronic representation of dollars (euros, yen, etc.) which solves the double-spend problem in an efficient way, is the most likely contender. But in an increasingly-online world, I'm not sure we even need that.

          We do not. Banks do just fine with regulation, audit requirements and very hard bookkeeping requirements. When is the last time a bank actually fiddled with the numbers about how much money it had? Right. Does not happen except in failed states. Long before that even becomes possible, the regulator comes down on them like a hammer.

          In Europe, they are currently preparing instant bank transfers for online payment, basically for free and mandatory for all banks to participate in. Some countries already have it

      • "im confused about why a person would wish for ultimate failure of a free independant store of value currency."

        Because the idea that you could get everybody to agree upon a decentralized, universal currency is dumb. Why in heaven would anybody agree to that when large parts of the currency are still being held by a small number of initiators and early adopters?

        Imagine if I invented a currency, and the technology to make it counterfeit-proof. And then I said, "Let's all use this limited supply of currency t

      • They're wishing for its failure because so much of the traffic is tax evasion, evading international trade sanctions, and outright criminal behavior such as trading in opioids, selling fraudulent medication, slavery, and even organ trafficking.

    • Re: (Score:3)

      by chthon ( 580889 )

      Cryptogeddon

      Cryptognarok

      Cryptocalypse

    • All these sort of replies sound a lot like sour grapes to me.

      How many times have bitter people like you called the 'death of crypto' now?

    • Re: (Score:2)

      by gweihir ( 88907 )

      Tulips never left. They are not expensive and they are not used for speculation or as currency, but unlike crapcoins, tulips have real-world value.

  • Release (Score:1)

    by Anonymous Coward

    Release the Kraken .. employees.

  • Quite frankly, is there anyone left who still believes there is a chance this will rise again? All I see is a bunch of top level idiots that are desperately hoping that there just might be a bigger one.

    • Re: (Score:2)

      by dmay34 ( 6770232 )

      Of course it will rise again. It will probably rise to a new peak beating the previous peak.

      It'll do this because it's a rigged game of chicken. It'll drop to some level where rich people will start buying it up which will raise the price rapidly. Then they sell all at once and crash the price. This is literally the whole game.

      • Re: (Score:2)

        by gweihir ( 88907 )

        Not necessarily. If crapcoins get regulated and exchanges count as financial institutes, exchanges will go away. And then this stuff will be dog-slow and have exorbitant transaction fees.

  • More like crypto death rattle.

  • Crypto winter, aka "normal winter for people that weren't incredibly stupid".

  • Increasing the number of employees by a third over a 12-month period? Unless you're starting with a very small workforce, that feels like a prime example of what Alan Greenspan referred to back in 1996 as "irrational exuberance".

    Greenspan didn't actually coin that term; it was dreamed up by Yale professor Robert J. Shiller, who wrote, "Irrational exuberance is the psychological basis of a speculative bubble. I define a speculative bubble as a situation in which news of price increases spurs investor enthus

  • What did they do? (Score:5, Interesting)

    by Sloppy ( 14984 ) on Wednesday November 30, 2022 @01:18PM (#63091168) Homepage Journal

    I can't fathom how an exchange would even have a thousand people to lose in the first place. Or even a hundred. WTF could a hundred employees at an exchange possibly be doing all day? Nothing related to exchanges, I would bet.

    And holy crap, to support such a staff, the exchange would have to skim huge fees, making it so ridiculously uncompetitive that I can't imagine they would surv-- oh, right. That's the story.

    • Re:What did they do? (Score:5, Insightful)

      by Waffle Iron ( 339739 ) on Wednesday November 30, 2022 @01:44PM (#63091254)

      I thought that the whole point of cryptocurrencies was to give power back to the people by disintermediating financial transactions.

      But what was the first thing that crypto fans did once they got things up and running? They set up a whole bunch of byzantine opaque and bloated intermediaries to control everything. Same as it ever was.

      • But what was the first thing that crypto fans did once they got things up and running? They set up a whole bunch of byzantine opaque and bloated intermediaries to control everything.

        To be fair, that was the first thing they did ... after discovering they couldn't have it all to themselves.

    • Social media promotion. "Writing or journalism". Go to coindesk and start clicking and reading. They just generate "content"... it gives the impression of value, of credibly.

      A couple of guys here on /. Were saying they worked at crypto companies in California. .. and that they were the only techies for miles. Also, most "employees" are to a large degree compensated in the coin of the company.
    • My guess would be customer service. We called these things exchanges but for all intents and purposes their Banks. Thanks have a lot of customer service reps and sales reps.
    • I have no idea what employees were doing at *those* exchanges but I can tell you that at *real* exchanges, all of those "electronic" transactions are manually reconciled by humans at the end of the day. On LinkedIn, the NYSE is listed as having 1000 to 5000 employees. Running an exchange is no simple task. I know nothing about Kraken but if they were genuinely just an exchange and not running actual crypto scams, they will need a lot of people and it's not as high margin of a business as the more esoteri

  • Going to be a long "winter" (Score:4, Informative)

    by Ritz_Just_Ritz ( 883997 ) on Wednesday November 30, 2022 @01:20PM (#63091174)

    The ECB seems to think that this is just another circle of the bowl on the way to irrelevance for Bitcoin/crypto-currency.

    https://www.theguardian.com/te... [theguardian.com]

    Best,

  • No legitimate use for crypto (Score:1)

    by Anonymous Coward
    If you want drugs then campaign for their legalization. If you want to evade sanctions then stop being a shitty dictator. If you want to get rich then get a job providing real value instead of Ponzi scheming.

    • Re: (Score:2)

      by dmay34 ( 6770232 )

      You don't even have to stop being a shitty dictator. Just sell your raw materials to western and Chinese markets and don't invade other countries. Do that and no one cares what you do inside your own borders.

  • Every tech companies seem to be engaged in massive layoffs. The market is going to be full of unemployed devs, wages are headed to $0. It's a big reversal, I guess software development is now a dead end.

    • Re: (Score:2)

      by spth ( 5126797 )

      Kraken probably doesn't even have that many devs to lay off.

      Kraken is a globally operating financial institution. I would assume, as is common for such institutions, that a large part of their staff is compliance staff. And with fewer transactions happening now, they neither need nor can afford as many as before.

    • Companies proclaiming they are reducing staff 10% makes headlines, even if the reality is only 5% of the staff were let go and the other 5% were paper reductions where open reqs were canceled. But the announcement itself might boost the stock price up a smidge, by impressing Wall Street with the "toughness" of a CEO who using silly excuses for cutting jobs when the company is still very profitable.

      But a hundred small companies increasing their staffing by 20% does not make the news, even if the two things

    • I have lived through the DotCom era and the 2007-2008 recession. Right now we have many people in roles for which they aren't quite qualified because employers need to fill positions and what's available is better than having the position open. Wages won't go to zero or at least not zero on average. There will be some wage pressure (probably raises will rise in nominal terms but be negative in real terms) but the tech industry has always been better after the recessions because (a) dumb businesses go ban

  • ...what, exactly?

    Really. Really? I can't fathom what they are doing with that many employees.

  • How is it that Kraken had as many pre-layoff employees as Twitter did pre-layoff?

    What the hell were they doing all day?

    • Re: (Score:2)

      by spth ( 5126797 )

      Both Twitter and Kraken are operating globally.

      Twitter is a microblogging service. These are just now becoming the subject of government regulation, and still unregulated in most of the world.

      Kraken is a financial institution. Those are heavily regulated virtually all over the world, and have been for at least a century.

    • They are an exchange. NYSE and NASDAQ both have that number of employees. Google some other exchanges, I expect to see similar. Running an exchange is a complex operation that takes a lot of people. Especially the fully automated electronic ones because there's a lot of auditing to do

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