Cryptocurrency exchange Kraken laid off around 1,100 workers, or about 30% of its staff, on Wednesday, according to a blog post by CEO Jesse Powell.
Powell blamed the layoffs on the "crypto winter," the prolonged market downturn in the crypto industry that has led to the bankruptcy of major crypto firms like FTX and BlockFi.
"Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets," he wrote. "This resulted in significantly lower trading volumes and fewer client sign-ups. We responded by slowing hiring efforts and avoiding large marketing commitments. Unfortunately, negative influences on the financial markets have continued and we have exhausted preferable options for bringing costs in line with demand."
The post stipulated that departing employees would receive 16 weeks severance and health coverage, an extended window to vest stock options, immigration support for visa holders and career support — a fairly standard package compared to other major tech layoffs this year.
Still, the layoffs are a surprise backslide for a company that publicized it was still hiring in June after its rival exchange Coinbase announced staff cuts.
The announcement also comes after a settlement earlier this week with the U.S. Department of the Treasury in which Kraken agreed to pay about $360,000 for violating sanctions against Iran by allowing people inside the country to trade on its platform.
Kraken was formerly based in San Francisco but closed its headquarters in the city, with Powell blaming the move on crime and lack of safety for his employees at its Market Street office.
Powell, who announced he will be stepping down as CEO next year, has attracted plenty of controversy for his charged discussions with employees about race and gender, and an ultimatum to staff that they needed to get on board with the firm's libertarian values or leave.
Kraken is now the third-largest cryptocurrency exchange in the world, after the former third place holder, FTX, filed for bankruptcy this month.
