Chainalysis cuts staff by 15%, shifts to government contracts
In response to challenging market conditions, blockchain analytics firm Chainalysis has confirmed a significant workforce reduction, shedding approximately 15% of its employees, totalling around 150 staff members.
This marks the second round of layoffs for the company this year, as the ongoing crypto bear market has continued to exert pressure on the industry. In its first layoff, the company laid off 48 employees.
Madeleine Kennedy, the Vice President of Communications at Chainalysis, confirmed the layoffs and emphasized the company’s commitment to long-term success as a consistently top-performing software company. She stated:
“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. We remain committed to our mission to build trust in blockchains among government agencies, financial institutions, and cryptocurrency businesses.”
Chainalysis focusing on government contractsCopy link to section
In an internal email to the company’s staff, Chainalysis CEO Michael Gronager revealed that the firm would be pivoting away from the commercial market.
Instead, the company plans to concentrate its efforts on government contracting, a sector it perceives as more stable in the current environment. This strategic shift aligns with Chainalysis’s mission to foster trust in blockchains among government agencies, financial institutions, and cryptocurrency businesses.
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Pragmatic approach amid challenging crypto market conditionsCopy link to section
The crypto industry has been grappling with market volatility, liquidity concerns, and dwindling trading volumes.
Bitcoin, the flagship cryptocurrency, has struggled to breach the $30,000 resistance level, remaining range-bound for the past six months. The cryptocurrency market capitalization has also witnessed a 64% decline from its peak nearly two years ago, further complicating the situation.
The shift by Chainalysis, towards government contracts appears to be a pragmatic response to the evolving landscape, where regulatory pressures and market uncertainties continue to shape the industry’s trajectory. The move also aligns with the firm’s revenue structure, as 70% of its income is reportedly derived from the public sector.
Chainalysis is not alone in its struggle to adapt to the changing crypto landscape, as several other prominent companies within the sector have also been compelled to restructure and reduce their workforces in 2023.