Transformation in the Crypto Winter: Behind Kraken's 1,100 Layoffs

In this ever-changing cryptocurrency field, the collapse of FTX is undoubtedly a bombshell, which has profoundly affected the confidence and pattern of the entire market. Immediately afterwards, Kraken Exchange announced the layoff of 1,100 people, indicating that the crypto industry is experiencing an unprecedented winter. This series of events not only reflects the turmoil in the market, but also forces us to think about the future direction of cryptocurrency and the industry's response strategy.

In this sudden winter, the layoffs are behind profound market adjustments. The volatility of cryptocurrencies makes it impossible for many companies to bear the continued operating costs, especially those exchanges that rely on high leverage. Kraken's layoffs are as high as almost one-third of its total employees, showing the exchange's extreme caution about the future and its careful consideration of the industry's prospects. As an old exchange founded in 2011, Kraken's decision will undoubtedly trigger extensive discussions inside and outside the industry.

In this industry change, investors' psychology is also quietly changing. Once upon a time, cryptocurrency was seen as a shortcut to get rich quickly. However, with the volatility of the market and the exposure of risks, more and more investors have begun to re-examine this asset class. Rational investment concepts have gradually replaced blind following, and many people have begun to pay attention to the fundamentals and technical strength of the project, not just price fluctuations. This change not only affects investors' decisions, but also prompts projects in the industry to pay more attention to transparency and compliance.

For Kraken, layoffs may be an effective means of reducing costs in the short term, but in the long run, how to reshape the corporate image and improve user experience and service quality are the real focus of its attention. With the changes in the market environment, companies must have the ability to adapt flexibly in order to survive this cold winter. The glory of the past cannot guarantee future success. Only by continuous innovation and keeping pace with the times can we be invincible in the competition.

Whether the market will gradually pick up in the days to come remains an open question. However, it is certain that the reshuffle of the cryptocurrency industry has begun. Only those companies that can adapt to changes, continue to learn and progress will have the opportunity to occupy a place in the future market. Although Kraken's layoffs are a sad story, perhaps it will become the starting point for industry change. Only after experiencing the cold winter can we usher in the dawn of spring.

In summary, the collapse of FTX and the layoffs of Kraken are both epitomes of the severe challenges facing the cryptocurrency industry. Both companies and investors need to examine themselves in this change and find new ways out. How the future cryptocurrency market will develop is worth deep thought and expectation for each of us.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Coin Circle (120Btc.com): With the collapse of FTX and the decline of the macro situation, following the official bankruptcy of the cryptocurrency lending platform BlockFi on November 28, yesterday evening (30), the old cryptocurrency exchange Kraken, founded in 2011, also received the bad news of 30% layoffs.

According to the official announcement of Kraken Exchange, Kraken will lay off 1,100 employees worldwide, accounting for about 30% of the company's total number of employees, to adapt to the cryptocurrency winter. The main reason for the layoffs is the sharp decline in the exchange's trading volume, the sharp decline in the number of new registrations, and the company's operating costs are too high.

Kraken Exchange founder Jesse
Powell also tweeted in the early morning of today (1) to express regret for the final decision to lay off employees: This is a difficult day for Kraken. Although the macro situation is very severe, we have persisted. The recent difficulties in the industry have weakened our optimism about the short-term rebound of cryptocurrencies. It is a pleasure to take good care of our former colleagues. It is our honor.

From Kraken CEO Jesse Powell’s tweet

 Generous layoff benefits

Back to Kraken’s official announcement, Powell did give the laid-off employees the “good treatment” he described in his tweet. The severance benefits include generous severance pay, additional performance benefits, and additional welfare insurance:

 Severance pay: Pay 16 weeks of base salary to Kraken employees who leave, including paid vacation.

 Performance bonus: Pay performance bonuses determined by managers to eligible departing employees.

 Benefits: Continue to provide 4 months of medical insurance for eligible departing employees.

 Extend the exercise window: Extend the unlocking window for vested stock options for departing employees.

 Immigration support: Provide special visa and immigration support for departing employees who currently hold company-provided visas.

In the past few years, the cryptocurrency industry has been like a gust of wind, sweeping investors and technology developers around the world. The prices of digital assets such as Bitcoin and Ethereum have repeatedly hit new highs, attracting countless capital influxes. However, with the bankruptcy of FTX, market confidence has suffered a heavy blow, followed by a wave of layoffs in major exchanges. Kraken's layoffs are undoubtedly a helpless choice to adapt to this winter.

Layoffs are not only a means of survival for enterprises, but also a direct reflection of changes in the market environment. Kraken's decision to lay off employees is essentially a response to changes in market demand. With investor sentiment depressed and trading volume significantly reduced, many exchanges are facing unprecedented challenges. According to statistics, at the beginning of 2023, global cryptocurrency trading volume fell by nearly 70% from the previous year. In such a market context, Kraken's layoffs are particularly timely and necessary.

However, layoffs are not the only way to solve the problem. In this cold winter, other companies in the industry have also begun to explore new ways to survive. For example, some exchanges have begun to optimize their business structure, focus on core products, and improve user experience. In the process, the application of innovation and technology has become their important strategy. By introducing more advanced trading technology and risk control systems, these companies hope to rebound quickly when the market recovers.

It is worth noting that Kraken's layoffs have also triggered thinking among many people in the industry. Many people believe that layoffs are not a long-term solution for corporate development, but may lead to talent loss and weakening of corporate culture. The competition for talent in the crypto industry is extremely fierce, and excellent talents can often bring huge value to the company. Therefore, how to retain talent has become a challenge that many companies must face in the cold winter.

In this process, the power of the community has become increasingly prominent. Many crypto projects have begun to attach importance to communication with users and enhance users' trust by establishing good community relations. This shift not only helps the long-term development of the project, but also lays the foundation for the recovery of the entire industry. After all, in this uncertain market, trust is the most valuable asset.