Kraken Cuts 15% of Workforce Amid Structural Changes Under New Co-CEO Leadership

US-based cryptocurrency exchange Kraken has announced layoffs as part of broader structural changes under its newly appointed co-chief executive, as reported by Bloomberg. While Kraken’s spokesperson declined to specify the number or roles of affected employees, the New York Times reported that around 400 jobs, or approximately 15% of Kraken’s workforce, were cut.

These adjustments come as Arjun Sethi, co-founder of venture capital firm Tribe Capital, steps into the role of co-CEO alongside Dave Ripley. According to a company blog post, Kraken is making "organizational discipline decisions” to streamline operations, reducing management layers that had expanded as Kraken’s annual revenue surpassed $1 billion.

Founded in 2011 in San Francisco, Kraken has been broadening its market presence and exploring an IPO. Earlier this year, Bloomberg noted that the exchange was considering a final funding round ahead of the potential public offering. “Making organizational changes is never easy, and we understand their profound impact on people’s lives,” Kraken expressed in the blog post.

The layoffs follow a series of similar cuts across the crypto sector. This week, Ethereum network software provider Consensys cited regulatory uncertainty as a factor in its decision to reduce its workforce by 20%, while decentralized finance developer DYdX Trading Inc. also announced a 35% reduction in employees.

Kraken’s trajectory, like many crypto companies, could be influenced by future US policies on digital assets, especially as the upcoming US elections may bring regulatory shifts. Last year, Kraken faced SEC allegations of operating as an unregistered broker, dealer, exchange, and clearing agency, later settling separate charges over its staking services in February 2023.