Chainalysis Lays Off Another 150 Employees Amid Ongoing Market Downturn
In response to the ongoing market downturn and reduced commercial demand, blockchain analytics firm Chainalysis is laying off another 150 employees, representing over 15% of its workforce.
CEO Michael Gronager informed employees of the decision in an email on Monday evening, according to a recent report by Forbes.
The new round of layoffs comes as the decline in cryptocurrency prices over the past year has limited the demand for Chainalysis products, prompting the company to shift its focus away from the commercial market.
Instead, it will concentrate on government contracting, which provides a more stable revenue stream.
“We are going to focus on profitability and maturity and to ensure that we are agile in light of evolving market forces,” Madeleine Kennedy, Vice President of Communications, said in a comment.
Chainalysis Layoffs to Impact Marketing Team
The majority of the layoffs will affect the marketing and business development teams that primarily serve the private sector.
These roles have become increasingly challenging as the price of Bitcoin has dropped by 60% from its all-time high of $69,000 in November 2021.
With reduced trading revenue and blockchain activity, the need for Chainalysis products, which assist cryptocurrency exchanges and companies in identifying illicit transactions and ensuring regulatory compliance, has diminished.
As the company pivots toward the public sector, which already accounts for 70% of its revenue, it aims to expand its core offerings’ investigative capabilities to meet the future needs of governments.
“The public sector still has a lot of way to go in creating a safe and regulated environment,” Kennedy said.
“In addition to anti-money laundering regulations, there’s still lots of other regulatory issues like prudential soundness, market conduct, and consumer protection that need to be addressed.”
While the market downturn has forced the company to lower growth expectations for the remainder of the year, Kennedy assured that Chainalysis has sufficient cash reserves to weather the bear market.
Chainalysis Reduces Staff For Second Time in 2023
The recent job cutdown marks the second round of cuts for Chainalysis, which was valued at $8.6 billion in 2022.
Back in February, the company confirmed plans to lay off less than 5 percent of its 900 employees, meaning the cuts affected 40 to 50 jobs.
At the time, a Chainalysis spokesperson told Bloomberg that the job cuts were part of a broader reorganization plan.
Notably, several major crypto firms have downsized their workforce in recent times, following a string of high-profile collapses and bankruptcies within the sector.
Coinbase, for one, has been among the many crypto companies that have been hit hard by the recent crypto meltdown, announcing three rounds of layoffs since the FTX fallout.
More recently, crypto infrastructure provider Qredo has announced plans to reduce staff and expenses as it navigates the challenges posed by the ongoing bear market.