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Kraken, a crypto exchange, eliminates 1,100 jobs

Kraken, a cryptocurrency exchange, has stated that it would be laying off 1,100 employees. The revelation was made public in a blog post by the firm, and it follows a similar statement by DoorDash.

Given the dismal macroeconomic environment and the much gloomier conditions in crypto-land, the news that Kraken is slashing staff—and hence costs—is not surprising. This year has already witnessed many high-profile implosions at and among web3 firms, as well as layoffs from other exchanges, notably the American crypto powerhouse Coinbase.

According to Kraken, the 1,100 impacted workers constitute around 30% of its team, making these layoffs more severe than the typical 10%-20% cutbacks witnessed at technology businesses this year.

The exchange said that it had to slow its recruiting pace and avoid “huge marketing commitments” due to “much lower trading volumes and fewer customer sign-ups” this year, but that the layoffs were still required due to “bad impacts on the financial markets.”

DoorDash made layoffs due to “macro” effects, adopting a similar tone about the current state of the business.

This year, layoffs have become routine in the IT industry. Many technology companies, from startups to industry titans, have sought to reduce expenses in response to slower-than-expected growth or the need to reduce unprofitability in response to changing investor sentiment. The “growth at all costs” mantra of the previous year has collided with market expectations for cleaner P&L statements in the current year.

Layoffs in the IT industry have ramped back up after a brief lull. Kraken’s layoffs aren’t shocking, even if they account for a larger percentage of the company’s total employment than we’ve seen among other businesses, since the crypto industry has undergone a faster contraction this year than the technology sector more generally.

Companies like Coinbase and Kraken aren’t the only ones cutting down on staff. Even OpenSea, whose price soared during the age of 2021’s startup and crypto bubble, was forced to lay off employees.