Nansen, one of the leading blockchain analytics platforms has decided to lay off almost 30% of its workforce citing an immense aggressive hiring phase during the bull market and the prolonged crypto bear market that has continued since last year.
2022 was a brutal year for the crypto market. Top digital tokens including the poster boys, Bitcoin (BTC) and Ethereum (ETH) plunged to unexpected lows. Several high-profile crypto-focused companies crumbled due to a massive liquidity crunch, filing for bankruptcy. Others announced mass lay off including numerous other cost-cutting measures.
Catastrophic events such as the Terra/Luna and FTX collapse exacerbated investor woes with billions worth of customer funds lost in the market frenzy. The financial predicament was so intense that many companies are still reeling under the losses incurred last year.
Another Casualty Amid The Ongoing Crypto crisis
On May 30, Nansen CEO Alex Svanevik took to Twitter to reveal the company is reducing its workforce by 30% as a result of the company reassessing its strategy as well as coping with the harsh conditions of the ongoing crypto market rout. The CEO explained two major reasons for the reduction in Nansen’s workforce.
This week we announced the extremely difficult decision to reduce the size of the Nansen team.
I’m endlessly grateful to the incredible people we are parting ways with. They will go on to achieve great things, and we'll ensure they get a soft landing, with severance and support.
— Alex Svanevik 🐧 (@ASvanevik) May 30, 2023
The first was the company’s rapid scaling during its initial years of operation, which led the organization to take on the surface area that’s not truly part of Nansen’s core strategy. Secondly, he cited the brutal year for the entire crypto market that has resulted in many casualties among crypto firms.
It seems these factors triggered an unsustainable cost base for the current size of the company. Svanevik added that despite having several years of runway, the company has taken an “extremely difficult decision to reduce the size of the Nansen team”. The CEO further emphasized its top priority, for now, is to build a sustainable business. Svanevik wrote,
“A reduction of 30% of our team is significant. But we believe we need to make organizational changes to create the right conditions for those who stay with us. It may not seem like it today, but we are still committed to building the best workplace in crypto. Reducing our surface area will allow a smaller Nansen team to focus on shipping amazing products our customers love.”
Crypto Sparks Hope Despite Continuing Woes
The crypto world’s woes have continued this year, marked by plunging deposits, layoffs, and multiple legal hurdles. In January 2023, cryptocurrency exchange Coinbase announced a workforce reduction of 20%. Another crypto exchange Huobi was also planning to slash 20% of its workforce after reports of internal strife surfaced on social media.
Justin Sun's HR is communicating with all Huobi employees to change the salary form from fiat currency to USDT/USDC; employees who cannot accept it may be dismissed. The move sparked protests from some employees. Exclusive https://t.co/QB4sjDyHc7
— Wu Blockchain (@WuBlockchain) January 4, 2023
Furthermore, on May 29, Singapore investment firm Temasek Holdings cut the compensation of its senior management and the investment team following a staggering $275 million investment loss incurred after the collapse of FTX.
However, since the start of 2023, the cryptocurrency market has recorded some positive signs due to ease in macroeconomic activities which has led the crypto price to rally. The broader sentiment of the crypto market shifted from “positive” to “neutral” with Bitcoin (BTC) hitting the $30K mark after a 10-month-long hiatus.
On the other hand, the world’s second largest crypto, Ethereum (ETH), is also trading at $1,800 levels, which marked its highest peak since August 2022 after touching the levels of $2,100 in April mid 2023. Since the beginning of this year, top altcoins also posted significant gains with the global crypto market cap breaching the $1 trillion level.
