Blockchain analytics firm Chainalysis has cut 15% of its staff in its second round of layoffs. It was just in February this year that the firm had given notice to 5% of its workforce.
Chainalysis reportedly had an employee base of around 900 before the October cuts. Now, it is left with approximately 135 staff, as confirmed by a company spokesperson.
The move comes in the background of an ongoing crypto bear market that has reduced the demand for commercial products. The market capitalisation of digital assets has fallen by 64% from its peak which was almost two years ago. A majority of the top cryptocurrencies have remained flat too, with falling trading volumes and liquidity.
Bitcoin has also failed to break above its key level of $30,000 several times and has mostly remained range-bound for the past six months. Despite all of this, Chainalysis vice president of communications, Madeleine Kennedy, assured that the firm would remain committed to its mission to build trust in blockchains among government agencies, financial institutions, and cryptocurrency businesses.
She also said: “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.”
Back in February, the New York-based firm had cut 40-50 jobs in order to boost profitability in the light of worsening market conditions. In a similar event in 2019, Kennedy had explained that the layoffs will further aid the company on its path to profitability and to pivot its resources into product teams and go-to-market strategies.
She then added: “Market conditions necessitated early action…..The layoffs are a preemptive measure, meant to stave off the unexpected, including the possibility of an economic downturn…..We think that acting now is best for the long-term health of the business.”
The recent move follows a similar path taken by various other crypto firms. September saw Binance.US letting a third of its staff go as it was faced with intensified regulatory pressure. In the same month, venture-backed blockchain firm R3 also axed a fifth of its workforce. The reduction of headcount across various functions mirrored the “broader trends seen across the global tech industry in response to challenging macroeconomic conditions”, noted R3.
Others in the industry which has fired its workforce as a measure to combat the crypto winter include Coinbase and Robinhood. Yesterday, Chia Network also laid off 26 of its 70 employees. However, this was a result of the loss of its banking partnership with Credit Suisse, which had caused a costly delay of the firm’s effort to list as a public company in the US. According to Chia CEO Gene Hoffman, the layoffs are focused more on “ecosystem support” than sales and marketing.
He said: “Unfortunately, we’re going to lose some great people as we’ve endured a challenging funding environment over the past several months….It was a difficult decision to give the company the runway it needs.”