Chainalysis is laying off 150 employees, or more than 15% of its workforce, due to the ongoing market downturn and reduced commercial demand. In an email sent out on Monday night, CEO Michael Gronager advised staff members of the choice, according to a recent Forbes story.
The latest round of layoffs is due to the fact that the commercial sector has become less of a priority for Chainalysis as a result of the year-long decrease in bitcoin values, which has reduced the demand for its goods.
Instead, it will focus its attention on government contracts, which offer a more reliable source of income.
Madeleine Kennedy, vice president of communications, commented, “We are going to focus on profitability and maturity and guarantee that we are nimble in light of new market circumstances.
Layoffs at Chainalysis to Affect the Marketing Team
The marketing and business development teams, which mostly support the private sector, will be affected by the majority of the layoffs.
As the price of bitcoin has fallen by 60% from its all-time high of $69,000 in November 2021, these responsibilities have grown more difficult.
The demand for Chainalysis products, which help cryptocurrency exchanges and businesses identify unauthorized transactions and ensure regulatory compliance, has decreased due to decreased trading revenue and blockchain activity.
The company is shifting its focus towards the public sector, which already provides 70% of its revenue, and seeks to increase the investigative capabilities of its core goods to satisfy future demands of governments.
In order to provide a secure and controlled environment, the public sector still has a long way to go, according to Kennedy.
“There are still many other regulatory issues, such as prudential soundness, market conduct, and consumer protection, that need to be addressed in addition to anti-money laundering regulations.”
Kennedy promised that Chainalysis has enough financial reserves to weather the bear market, despite the fact that the company has had to cut its growth goals for the rest of the year due to the market slump.
Chainalysis Cuts Employees Again in 2023
The recent layoffs signal Chainalysis’ second wave of staff reduction; the company was valued at $8.6 billion in 2022.
In February, the business announced plans to eliminate 40 to 50 jobs, or less than 5 percent of its 900 employees.
A spokeswoman for Chainalysis told Bloomberg at the time that the job losses were a component of a larger reorganization strategy.
Notably, a number of significant cryptocurrency companies have reduced their workforces recently as a result of a number of high-profile breakdowns and bankruptcies in the industry.
Coinbase is one of the numerous cryptocurrency businesses that have suffered greatly as a result of the recent crypto catastrophe, having announced three waves of layoffs since the FTX disaster.
Gemini, a cryptocurrency exchange with headquarters in New York, previously declared that 10% of its staff would be laid off.
More recently, as it navigated the difficulties brought on by the current bear market, crypto infrastructure company Qredo announced plans to cut staff and expenses.