Laid off staff were left ‘clueless and upset’ after being locked out of laptops with little warning.
Staff laid off by crypto giant Kraken say they only learned of their redundancies when they were locked out of their computers, and discovered their fates via news reports.
A former UK staffer at the firm told Financial News: “I went to get a coffee, came back and was locked out [of my laptop] and checked the news and saw it announced on CNBC.”
Several hours later, they heard from the company via a message sent to their personal email accounts.
They said that when it comes to redundancies, firms should “prepare their staff it’s coming”.
Kraken, the world’s third-largest crypto exchange by volume, became the latest to slash jobs in the sector on 30 November, cutting about 30% of its global workforce in response to a drop in trading volumes and fewer client sign-ups.
Like many crypto firms, Kraken has come under fire for how it treated employees deemed surplus to requirements. The same staff were referred to with pet names, a common phenomenon among crypto employers. In the case of Kraken, employees were called ‘Krakenites’.
The firm said the layoffs will push total headcount back to the staff levels of 12 months ago.
Laying people off in such a swift manner is becoming increasingly common, particularly in the US tech sector. Twitter staff suffered a similar experience as the tech firm axed an estimated half of its 7,500 employees, according to The Wall Street Journal.
But crypto firms, in particular, have repeatedly faced criticism when it comes to corporate governance, which includes HR governance and leadership across all a company’s business units. FTX’s administrator, John J Ray III, said the firm’s corporate controls and accounts were worse than those of Enron, whose liquidation he also oversaw.
Separately, two former directors of bankrupt crypto lender Celsius hammered the firm’s apparent lack of controls in an interview with FN in November.
One of them, Rohit Sabhlok, said: “[Crypto people] haven’t lifted up a layer to corporate governance, legal entities and accounting. They don’t have that language yet.”
Coinbase faced criticism in June when 1,100 workers – or “Coinbasers” – found out they had lost their jobs by rapidly losing access to internal systems.
In accounts corroborated by the company, multiple other former Krakenites told FN they found out the same way.
A former product manager in the US described the initial redundancy process at Kraken as “savage”.
They added that some of their team were left “clueless and upset”.
“They made a public post on Slack, if you saw it,” the ex-product manager told FN. Shortly after, “the computers just shut down and locked us out”.
“Then they emailed [a] blog post they made [on 30 November] to our personal emails. And that’s it, all I’ve seen so far.”
A Kraken spokesperson said the job cuts were “necessary to adapt to current market conditions”. They added that supporting laid-off staff was the firm’s “top priority”.
They said: “Consistent with our security and IT protocols, and to protect the security of all Krakenite and client data, we placed all impacted individuals on paid leave and deactivated all system access.
“We notified each individual via personal email address and offered one-to-one conversations to discuss the selection process and details of the separation package.”
The UK-based staffer told FN on 6 December that they had had “no contact” with Kraken about one-to-one discussions. They said group redundancy consultations would take place later in the week.
Kraken had a “solid” culture, the UK-based ex-staffer told FN of the firm’s culture while they worked there. “So [I] was gutted when this happened”.
The US-based person added that the decision to cut people was likely to be a security-related decision, “rather than a lack of caring for employees”.
Both former staffers said Kraken planned to follow through with the severance package announced at the time of the cuts, including 16 weeks of separation pay and other benefits.
However, a third former US-based worker who was employed as a contractor via an outside firm, told FN they had not received severance pay.
Kraken treated them like a “full-time, very immersed employee the whole time. Most people didn’t even know I was a contractor,” they said.
“My future seemed bright,” they said.
Kraken chief executive Jesse Powell tweeted on 30 November that he was glad the firm was able to “take good care” of former colleagues.
The US staffer who was employed as a contractor said they experienced a “total lack of communication” from the company.
“In the end, they just dropped me instantly and completely on the premise that it is technically up to the RPO [recruitment process outsourcing] company to take care of me,” they said. “Both companies were 100% cold, offered nothing, and laid me off via sudden IT shut-downs.”
This artical was originally published by fnlondon.
