Amidst the current market downturn and a dip in commercial interest, Chainalysis, a blockchain analytics company, is reducing its staff by 150, which equates to over 15% of its total workforce.
Michael Gronager, the CEO, relayed this decision to the employees through an email on Monday evening, as covered by a recent Forbes article.
This fresh wave of layoffs is attributed to the slump in cryptocurrency values over the past year, which has in turn affected the demand for Chainalysis’s products. Consequently, the company is pivoting away from the commercial sector.
Their renewed focus will be on securing government contracts, as it offers a steadier source of income.
Madeleine Kennedy, the Vice President of Communications, mentioned, “Our objective is to emphasize profitability and operational maturity, ensuring we remain adaptable in the face of changing market dynamics.”
Chainalysis Layoffs to Impact Marketing Team
The brunt of the layoffs will impact the marketing and business development departments that predominantly cater to the private sector.
This move comes as Bitcoin’s price has seen a significant 60% decline from its peak value of $69,000 in November 2021, making these roles more challenging.
Due to a decrease in trading revenue and blockchain activity, there’s less demand for Chainalysis’s services. Their products, which help cryptocurrency exchanges and businesses detect unlawful transactions and adhere to regulations, have seen reduced interest.
However, as Chainalysis shifts its focus to the public sector, which currently generates 70% of its revenue, the company intends to enhance its main product’s investigative features, aiming to cater better to government requirements in the future.
“The public sector has significant ground to cover in establishing a secure and well-regulated landscape,” Kennedy commented.
She added, “Beyond anti-money laundering measures, there remain myriad regulatory challenges, from ensuring financial stability to addressing market practices and safeguarding consumers.”
Even though the market slump has prompted Chainalysis to adjust its growth projections for the upcoming months, Kennedy emphasized that the company is financially robust, with ample cash reserves to navigate through the bearish phase.
Chainalysis Reduces Staff For Second Time in 2023
This recent workforce reduction is the second of its kind for Chainalysis, which held a valuation of $8.6 billion in 2022.
Earlier in February, the company announced its intention to lay off under 5% of its 900-strong workforce, translating to around 40 to 50 positions.
A representative from Chainalysis conveyed to Bloomberg back then that these layoffs were a component of a larger restructuring strategy.
It’s worth noting that Chainalysis isn’t alone in this trend. Several prominent crypto entities have been trimming their staff recently, amidst a series of significant setbacks and insolvencies in the industry.
Coinbase stands out as a prime example of crypto firms grappling with the market’s downturn, having rolled out three separate layoff announcements following the FTX debacle.
Additionally, earlier in the year, the New York-headquartered cryptocurrency exchange, Gemini, disclosed its decision to part ways with 10% of its staff.
In a more recent development, Qredo, a company offering crypto infrastructure solutions, shared its intentions to curtail both its workforce and operational costs, as it steers through the trials brought on by the persisting bearish market.