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Kraken lays off 30% of staff

blog.kraken.com

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Re: Kraken lays off 30% of staff

#121

Post by bombcar »

stickfigure wrote: post #83
hn_throwaway_99 wrote: post #29

Earlier quoted context omitted.

I feel like HN should just auto add a comment that says "Why does need employees?" with a follow up comment that explains how large corporations work. It literally comes up in every single layoff announcement or other discussion of company size in some way, and the follow on comments are essentially the same every single time. I'm not saying that a lot of these companies aren't overstaffed (indeed, that's why they ar…

I've come to look at it the other way. "Because that's how large companies work" is a lazy non-answer. An honest answer to this question would break it down: # of engineers, # of ops, # of sales, # of hr, etc. And ideally break it down by business division. Of course that requires some real domain knowledge. I've personally watched morons come in, hire lots of useless employees, and destroy millions of dollars of cas…

I’m interested in the ratios - things like for every X coders you need Y managers and Z HR people, that kind of thing.

Re: Kraken lays off 30% of staff

#122

Post by woodruffw »

rich_sasha wrote: post #116
woodruffw wrote: post #18

> Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This is an incredible couching of the last 9 months of cryptocurrency market behavior. Does anybody actually operate on their belief that "geopolitical factors," rather than astonishing amounts of fraud , are responsible for the current downturn?

In fairness, Kraken is regulated and I suspect can't be involved in any of the crypto scams. I'd imagine they really hold deposits as they should etc. So for them it's the fact that markets are down and people aren't punting crypto, rather than "we took the USD deposits, turned them into shit coins and we're insolvent" kind of thing. I think.

Right: to be absolutely clear, I'm not accusing Kraken of anything untoward (at least, nothing more untoward than being involved in this whole industry).

The statement just came across as very roundabout: we all understand that the current downturn in cryptocurrency is driven in part by a decline in "easy money" from retail customers, which in turn is partially driven by a lot of that "easy money" outright evaporating from fraudulent schemes.

Re: Kraken lays off 30% of staff

#123

Post by bombcar »

rabuse wrote: post #41
CommitSyn wrote: post #4

> We’re reducing our global workforce by approximately 1,100 people, or 30 percent, in order to adapt to current market conditions. Why does a crypto exchange need 4,000 employees?

If it were up to HN, I swear, every company would just have 30 employees or it's a "waste".

I mean HN runs with like three dudes.

People have no trouble understanding why Walmart has 2.3 million employees - because they roughly understand “each store has X”.

Re: Kraken lays off 30% of staff

#124

Post by wpietri »

naillo wrote: post #67

Is it naive of me to think that CEOs aren't really much better macro predictors than most of us and are kind of doing this in a wave like fad "because that's what everyone else is doing"?

I think that's very realistic.

One of the really startling things for me the first time we deposited a big VC check was how compelling the experience is. Printing out an ATM receipt with 7 figures on it was very memorable. We had to remind ourselves that however much it felt like success, it didn't mean shit in terms of our real goals.

I think that's much harder for people who are in that situation with less life experience and little or no experience building actual businesses. Coaching at entrepreneur events, I discovered there are a lot of people whose goal is to "be the next Mark Zuckerberg" (or whoever) or who wanted to found a unicorn. Who were thinking about it as a life stage, as in "I'm not sure if I'll found a startup or go to grad school".

And I suspect that's even more true lately with the vast amounts of VC money sloshing around. It must be quite easy to pay more attention to your investors and your YC cohort and the tech press than the grubby realities of commerce.

Re: Kraken lays off 30% of staff

#125

Post by woodruffw »

programmarchy wrote: post #118
woodruffw wrote: post #47

Earlier quoted context omitted.

Are you saying that a YoY decline of 30% in the NASDAQ index is comparable to a 30% employee haircut? I don't think that's how it works.

No, by “also” I was referring to cryptocurrency markets not the 30%.

Sorry for the confusion. I agree that macro trends are having an effect; I think some of the other threads have a good amount of elaboration on the interaction between the macro economic climate and the crypto downturn (and particularly, why crypto's unique vulnerability to downturns makes it funny to place blame on the broader market).

Re: Kraken lays off 30% of staff

#126

Post by bombcar »

nsonha wrote: post #93
CommitSyn wrote: post #4

> We’re reducing our global workforce by approximately 1,100 people, or 30 percent, in order to adapt to current market conditions. Why does a crypto exchange need 4,000 employees?

In comparison, a certain "microblogging" platform has over 7500 while making no money or net positive value to society.

“Had”

Re: Kraken lays off 30% of staff

#127

Post by BlandDuck »

setgree wrote: post #46
woodruffw wrote: post #18

> Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This is an incredible couching of the last 9 months of cryptocurrency market behavior. Does anybody actually operate on their belief that "geopolitical factors," rather than astonishing amounts of fraud , are responsible for the current downturn?

We learned about the fraud because of macroeconomic factors! inflation -> rising interest rates -> crypto less attractive [0] -> people ask for their deposits back -> company can't meet obligations -> company folds -> scrutiny -> fraud revealed Is my basic model of things. [0] from https://marginalrevolution.com/marginalrevolution/2022/11/th... : "When interest rates are very low a dollar in the far future is worth a…

Spot on. Warren Buffet put this succinctly:

"When the tide goes out you discover who's been swimming naked."

Re: Kraken lays off 30% of staff

#128

Post by bombcar »

wpietri wrote: post #124
naillo wrote: post #67

Is it naive of me to think that CEOs aren't really much better macro predictors than most of us and are kind of doing this in a wave like fad "because that's what everyone else is doing"?

I think that's very realistic. One of the really startling things for me the first time we deposited a big VC check was how compelling the experience is. Printing out an ATM receipt with 7 figures on it was very memorable. We had to remind ourselves that however much it felt like success, it didn't mean shit in terms of our real goals. I think that's much harder for people who are in that situation with less life exp…

There is a weirdness with money - it feels very similar as income whether it is profit, an investment, or a loan.

Part of the reason cash out refinancing is so fraught with peril.

Re: Kraken lays off 30% of staff

#129

Post by rocket_surgeron »

rabuse wrote: post #41
CommitSyn wrote: post #4

> We’re reducing our global workforce by approximately 1,100 people, or 30 percent, in order to adapt to current market conditions. Why does a crypto exchange need 4,000 employees?

If it were up to HN, I swear, every company would just have 30 employees or it's a "waste".

Kraken had ~$1 billion in revenue last year.

With 3,700 employees, that's a revenue-per-employee of $270k.

If you are a startup, that is ok, maybe even great!

If you are not a startup, and are in tech/finance that is NOT OK.

Kraken is not a startup.

Of course, my context is the tech sector and not the scammy free-for-all that is crypto, so I may be off-base.

Their RPE is more like a struggling, dingily-lit, zombie chain of brick-and-mortar retail stores than it is a tech firm.

I know HN doesn't like metrics like RPE, but they're never wrong.

edit: just looked it up. For comparison, Binance has around 6,000 employees and around $20 billion in annual revenue which is off the charts in terms of RPE, even for oil and gas. That's a sign they need to hire more.

Re: Kraken lays off 30% of staff

#130

Post by UncleMeat »

woodruffw wrote: post #18

> Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This is an incredible couching of the last 9 months of cryptocurrency market behavior. Does anybody actually operate on their belief that "geopolitical factors," rather than astonishing amounts of fraud , are responsible for the current downturn?

For the life of me I cannot understand how every single layoff notice talks about "macroeconomic factors."

Inflation and interest rates are up - okay. But real GDP growth (in the US at least) has been positive. Why is everybody acting like unemployment is at 8%, GDP growth is sharply negative, and consumer spending is way down?

At least with crypto stuff it makes sense that these companies are losing shitloads of money but with so many companies it seems to be "we expect to be making less money next year so we are cutting staff now."

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