Kraken Confirms Layoffs Amid Leadership Changes

Kraken, the sixth largest cryptocurrency exchange by volume, has confirmed a round of layoffs, as reported by a representative to The Block. This news follows the announcement of Arjun Sethi as co-CEO, who will work alongside current CEO David Ripley to accelerate growth.

In a blog post detailing Sethi’s appointment on Wednesday, the co-CEOs stated, “We are also rolling out changes fundamentally changing how we innovate, build and roll out products for clients.” They acknowledged that the organization, having surpassed $1 billion in net revenue as a remote entity, had become too top-heavy, leading to a concentration of decision-making within management.

To address these issues, they stated, “We are making organizational discipline decisions to tackle this problem and eliminate layers. We need to be leaner and faster.”

Reports from New York Times tech reporter Mike Issac, citing two internal sources, indicate that Kraken has laid off 15% of its workforce; however, a Kraken representative declined to confirm this figure.

“We understand the profound impact on people’s lives when making organizational changes,” the blog read. They expressed appreciation for contributions from all employees and pledged support during the transition.

This downsizing aligns with a broader trend of layoffs in the crypto sector, which has also seen reductions at Ethereum development firm Consensys and decentralized derivatives platform dYdX, among others, amidst a pivot toward leaner structures across the tech industry.

Jesse Powell, Kraken's co-founder and board chair, expressed confidence in Sethi’s leadership, saying, “Arjun has served on the Kraken board since 2021 and has helped us navigate a lot of our toughest challenges.” He emphasized Sethi's ability to drive momentum in the company.

Sethi’s previous experience includes his role as CEO at Lolapps, which faced layoffs, and co-founding the crypto derivatives trading protocol Nibiru in September 2022. He is also one of the founders of Tribe Capital, established after leaving Social Capital as a partner.

Kraken had previously cut 30% of its staff in November 2022 to respond to market conditions during the crypto winter.