Chainalysis to Dismiss 48 Employees, Prepares to Reorganize Structure
After a year of a prolonged crypto winter that’s seen former industry powerhouses lay off large swathes of their employees in a desperate bid to stay afloat, other firms are also feeling the squeeze, even if their MO does not depend on asset prices exclusively.
Decline in Demand From Private Customers
According to Maddie Kennedy, the director of communications for blockchain research firm Chainalysis, a round of layoffs will be conducted shortly, targeting non-core personnel. According to Forbes, the dismissal spree will primarily target the sales team. Another group of employees will not be let go but instead given new roles and a new organizational structure.
According to Chainalysis, the layoffs are necessary due to a massive decline in customers from the private sector, who have decided to take a more cautious approach to cryptocurrencies given all that’s happened within the past year. Understandable, keeping in mind everything from plummeting prices to exploits galore and business implosions of epic proportions.
However, it’s worth noting that although Chainalysis does have lucrative contracts with investment-oriented firms such as BNY Mellon, over half of the research firm’s income – around 60%, to be exact – has come from contracts with various regulatory entities. These include the SEC, DEA, and the FBI, tracing down cyber criminals with their vast team of researchers.
Chainalysis Hopes The Downsizing Is Temporary
Although revenues have contracted, Bloomberg reports that the layoff – which is already small compared to other ones we’ve seen in the industry over the past year – is just the first step in a greater reorganization process that Chainalysis is undergoing.
Speaking at the World Economic Forum in Davos earlier this month, Chainalysis CEO Michael Gronager hinted at future plans for his company.
These include potential acquisitions of unnamed firms, presumably smaller research companies that could help Chainalysis consolidate its position, and a hiring spree. If all goes according to plan, Chainalysis may increase its workforce by about 11% until the year is out, bringing the total manpower to about 6% higher compared to its pre-layoff workforce.
As Bloomberg stated, the intensity of Chainalysis’ research strengthened in the last two months of 2022 due to the collapse of FTX and the subsequent tracking down of missing funds. With bankruptcy cases involving Celsius, Voyager, FTX, and others coming no closer to a resolution, it seems Chainalysis will continue to have its work cut out.
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