The more days pass, the more companies specializing in crypto currencies like Kraken find themselves in difficulty. And for good reason, a financial crisis that has been raging for several months has taken with it many heavyweights of the crypto industry.
While some stock exchanges have already filed for bankruptcy to limit the damage, others continue to resist the crisis. Among the exchanges that do not want to abdicate, there is one of the oldest crypto trading platforms, namely Kraken.
Despite its experience and notoriety in the crypto market, this company risks going bankrupt if it does not take drastic measures such as the dismissal of part of its workforce, which it has just done.
Kraken will lay off 1,100 of its employees
The crypto market is down. Even the biggest platforms, but also the oldest cryptocurrency exchanges have their backs to the wall. After FTX, Voyager Digital and many others, it’s Kraken’s turn to find itself in turmoil.
Indeed, the second oldest cryptocurrency exchange in the USA finds itself in a dilemma. Either it dismisses part of its staff to readjust its accounts, or it risks bankruptcy. Also, this situation is largely caused by the crisis that is currently shaking the crypto market.
A market which, let us remember, has already witnessed the collapse of the giant FTX and Sam Bankman Fried. In this context, according to cryptocurrency newssome crypto exchanges have downsized by laying off some of their staff.
Thus, Kraken, which seemed to resist the crisis so far, is today forced to take radical decisions in order not to collapse.
Therefore, the crypto exchange decided to part with 30% of its employees, i.e. 1,100 employees who worked regularly for the company. This announcement of the layoffs was made by Jesse Powel, the co-founder of the Kraken platform.
To justify this decision of the company, he put forward macroeconomic and geopolitical factors. He also indicated that this wave of layoffs is nothing but a correction of the growth of the previous year.
A year in which virtual currencies reached record highs and which Kraken profited from.
However, according to some analysts, this layoff decision follows the drop in trading volumes as well as the number of new customers on the platform which is in freefall.
Also, analysts believe that the company Kraken wants to proceed with this wave of layoffs so as not to engage in bankruptcy proceedings which could occur if no action to increase revenues or to lower costs would be put in place by the company.
Interesting guide : How to do a crypto currency mining ? Discover in this guide what is a cryptocurrency mining, the different ways to mine cryptocurrencies, how mining works, as well as the software to use and the best cryptocurrencies to mine in the years to come.
Kraken agrees to compensate employees who will be laid off
The decision to part with 1,100 employees is no longer to be discussed for the management of Kraken. However, the company does not intend to get rid of its employees and abandon them to their fate without financial compensation.
Indeed, the administration of Kraken has decided to compensate each of the employees on the list of dismissals. Also, each terminated employee will receive severance pay which will be the equivalent of 16 weeks of wages without bonuses.
Each terminated employee will also receive four months of performance bonuses, medical coverage and dedicated support if needed.