I feel like HN should just auto add a comment that says "Why does <company X> need <n> 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 are having layoffs!) but these questions always come across as pretty naive in the same way I hear "It's just a website! I could build that in a weekend"-type comments.

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 cash while producing negative effect on the product in a company I cofounded. It happens.

Despite the common refrain, the question is genuinely interesting and it deserves an interesting answer. What's old is the retort "that's just how big companies work". It might entirely be true that 4000 employees is reasonable (or even low!) for an exchange, but I'd really like to hear the arguments.

When growing headcount is a metric reported to the board, no wonder executives are hellbent on hiring any warm body off the street.

The answer might be interesting, but I don't think the question it is. I almost never see it in a form that indicates a sincere grappling with what it might take to do a given company's job. To me it mainly reads as arrogant dismissal that a company could possibly need that many people. It's along the lines of the general-issue jackassery of "I could build X in 2 weeks", which personally I find tiresome.

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

And for all of those people mentioned, they need custodians to clean up after them, and all of those additional people need their own managers, HR people, etc.

I think it is more "that's how growing companies work."

Companies don't hire tons more people to maintain their existing products. They hire more people because they want to build more stuff. If you are happy just having the thing you have and keeping it up, sure. But it is clear that the past five years or so has had a big scramble to try to scoop up as much of the crypto pie as possible so you can exit for billions. That means building new features. That means hiring a lot more people. And sometimes all those new people come in, fuck up in their mission to create more value for the company, and leave it worse off.

It is true that existing product offerings for a ton of companies could be maintained effectively by a subset of their workforce. A large portion of the employees are just working on building new shit.

Maybe they were needed to computerize their operations instead of using manual spreadsheets as some recent clownfests were reported to do?

The problem is that the numbers depend on a bunch of decisions made under a variety of pressures and constraints to solve a collection of business goals that we (the `people not involved in running the company) may only have a limited view of. There may be situations where it's justifiable to throw people at a problem versus a solution that uses less people. Inertia can keep the results of those decisions around for a long time.

Someone could certainly go through the exercise of deciding how many employees Kraken, Twitter, etc "should" have to perform the functions that someone is aware of, but it's an imprecise straw man at best.

When a company grows at a steady rate staffing can be carefully managed alongside the implementation of new technology to manage said growth.

However, when a company grows rapidly due to high interest in their product, the quickest way to manage that growth is typically going to be manpower.

There are indeed better solutions, but manpower works in a lot of industries, particularly those that grow their volume quickly.

I think the surging popularity of crypto prior to our current downturn sparked some rapid growth and the need for more workers.

On the technical side you really want to build your infrastructure so that it can scale up quickly, but on the customer facing side that's not always possible and thus you might need more personnel to man the chats and phones.

It's sometimes easy to look at a problem from an external view and go wow why do they do it that way, but in my own experience there are unseen internal reasons or obstacles for why a company is not doing it in a seemingly obvious better way.

But why is kraken a large corporation already?

Already? Kraken was founded in 2011 and had 1.1 billion in revenue in 2020 (and I imagine this amount was much higher during the 2021 boom).

I'm curious what their 2016 boom numbers were. Is there any way to find that data?

Yes, large corporations tend to get bloated. It doesn't have to be that way though. Many companies will come to find they didn't need nearly as many as they have after all.

I would agree that the more employees a company has, the more the architecture/design shapes around the size of their labor force. But it also doesn't have to be that way

Let's watch Twitter and see

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

Seriously. Everyone here seems to think every business should be a permanent bootstrapped, profitable company. If you play the venture game, which Kraken is, you need to grow fast. Typically, though not always, that means hiring people to support that growth.

WhatsApp is the exception, not the rule.

This is hacker news after all, lots of us are hackers that prefer non-VC boosted (nor "cryptocurrency boosted") businesses that are run a bit more lean. Although, it used to be called "Startup News" but lets just ignore that fact for a bit so we can scream at bloated companies for a bit longer.

HN thinks a junior developer bootstrapping a webapp over the weekend is production ready.

npm install crypto-exchange

And those other 29 people are just there to ask me dumb questions.

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”.

do they have pages for comments yet

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.

> Why does a crypto exchange need 4,000 employees

Because they’re not an exchange. They’re a broker, lender and apparently a bank [1].

[1] https://www.kraken.com/bank

I don't know if you are genuinely curious but this question is getting kind of old. Every time a company does layoffs, somebody asks, "why does an X company need X number of people?". Every opening has a purpose. No company hires people for fun, and unless you are a company employee you don't know all the different areas, projects, and support staff a company needs to run when they are actually a business trying to make money.

It is a genuinely curious question. I haven't seen the abundance of "Why do they have so many employees" question as I'm new here, and that just seemed like a lot of employees to have if they can just lay off 1/3rd of their workforce overnight.

I would assume most of the 1.1k people is support. You have timezones, hundreds of thousands of customers (if not millions). Kraken has one of the best support I encountered. But with less people buying/selling (as with Amazon: Less buying stuff, less using etc), companies are laying off Marketing, Customer Support, maybe Recruiters and HR. Maybe stopped side projects. I would not expect they shrink their engineering by much.

30% of Eng was cut. Multiple engineers on my team were cut. The QA team was basically wiped out. As far as I can tell, all the lawyers are still here.

You could have 300 like FTX and have completely inadequate financial controls.

A followup question, if I may: why does a crypto exchange need 2,900 employees?

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

“Had”

To show growth to investors.

Bingo

Mostly support people in my experience.

Because the crypto exchanges with less failed.