Chainalysis Cuts 15% of Workforce in Shift Towards Government Contracts
Blockchain analysis firm Chainalysis is downsizing, with approximately 150 employees, more than 15% of its workforce, facing layoffs.
As reported by Forbes, this move comes as the company shifts its focus away from the commercial market and towards more stable government contracts.
This is the second round of job cuts for the company, which was valued at $8.6 billion in 2022.
The decline in cryptocurrency values over the past year has reduced commercial demand for its products.
Madeleine Kennedy, the vice president of communications, stated:
"This reorganization reflects our ongoing strategic shifts to balance our growth aspirations. We are going to focus on profitability and maturity and to ensure that we are agile in light of evolving market forces."
Most of the job reductions will come from the marketing and business development teams that cater to 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.
This shift away from the commercial sector has resulted in decreased trading revenue and blockchain activity.
Consequently, there is reduced demand for Chainalysis products that aid cryptocurrency exchanges and other companies in identifying illicit transactions and maintaining regulatory compliance.
The company has also revised its growth expectations for the year due to these market dynamics, despite experiencing 50% growth from mid-2022 to mid-2023.
Kennedy noted that the firm has sufficient cash reserves to weather the current bear market, although specific figures were not disclosed.
Chainalysis is increasingly focusing on the public sector, which already contributes 70% of its revenue.
The company aims to enhance the investigative capabilities of its core offerings to meet the future needs of governments.