The crypto industry as a whole has experienced numerous job cuts in response to poor market conditions.
Blockchain analytics firm Chainalysis has reduced its staff by 15%, affecting approximately 150 employees as it grapples with the ongoing market downturn in the crypto industry. The job reduction marks the second round of layoffs for the company in 2023.
The company’s CEO Michael Gronager informed employees of the decision in an email, stating that the cuts are primarily aimed at reorienting the company’s focus away from the commercial market and towards government contracting, which offers more stability in the current climate.
Chainalysis Still Committed to Building Trust in the Crypto Market
Forbes first reported the news of the layoffs on Monday. On October 3, the company’s vice president of communications, Madeleine Kennedy, confirmed the report, stating that the job cuts were necessary to reduce expenses.
She further noted that despite the new staff reductions, the company remains committed to its mission to foster trust in blockchain technology among government agencies, financial institutions, and crypto businesses.
“While Chainalysis continues to be well positioned for long-term success as a consistently top-performing software company, we are very focused on growing efficiently and, due to market conditions, believe it necessary to reduce our expenses at this time,” said she.
The move aligns with the company’s strategic shift to prioritize profitability and adapt to evolving market dynamics.
Chainalysis to Focus on the Public Sector amid Its Staff Reduction
According to the company, the layoffs will primarily affect its marketing and business development teams focused on the private sector, where market conditions have become increasingly challenging.
The crypto market has witnessed a 60% decline in Bitcoin (BTC) prices from its all-time high in November 2021, leading to reduced trading activity and lower demand for Chainalysis products that aid in identifying illicit transactions and ensuring regulatory compliance.
As a result of these market changes, the company is shifting its focus towards the public sector, which already contributes to 70% of its revenue. The blockchain analytics firm aims to enhance its offerings to governments, aligning with their evolving needs for blockchain-related regulatory oversight, including anti-money laundering regulations, market conduct, prudential soundness, and consumer protection.
The company, headquartered in New York, was founded in 2014 and has since become one of the prominent data entities in the crypto industry. Chainalysis is well-known for collaborating with governments, including the United States, on crypto-related investigations.
Crypto Companies Grapple with Job Cuts
The crypto industry as a whole has experienced numerous job cuts in response to poor market conditions. In 2022, several crypto companies, including Crypto.com, Kraken, and Coinbase, had to reduce their workforce. The trend continued in 2023, with Coinbase opening the year in January.
Shortly after, Chainalysis conducted its first round of layoffs in February, impacting around 40 to 50 jobs. In March, Anchorage Digital, a crypto company providing institutional investors with integrated financial services, followed in the footsteps of Chainalysis to reduce its headcount, sending 75 employees out of their jobs.
Other crypto companies, like Elliptic and Messari, also followed suit with layoffs, reducing approximately 10% and 15% of staff, respectively.
Most recently, in September, the United States arm of Binance axed a third of its staff due to the increased regulatory pressure in the country.