Nansen reduces headcount by 30% in an effort to save costs

The excessively aggressive recruiting period during the bull market and the protracted crypto bear market that followed were two of the reasons given for the layoffs by the CEO of Nansen.

Nansen Cutoff 30% of its workforce

A blockchain data analytics firm called Nansen announced a 30% personnel decrease on Tuesday to reduce expenses in the face of the ongoing bear market in cryptocurrencies.

According to LinkedIn statistics, the firm, which was founded in 2020, had between 51 and 200 workers before the layoffs. For its customers, including media outlets like Bloomberg and The Block and crypto-centric firms like Polychain, the business was able to evaluate more than 100 million wallets across blockchains like Polygon and Ethereum because of its extensive human resource pool.

Reason for the Layoff

Alex Svanevik, CEO of Nansen, said on Twitter that the business had to make the “extremely difficult decision to reduce the size of the Nansen team.”

Svanevik cited two main causes for Nansen’s labor decline. First, the company’s earliest years of operation saw quick growth, which “led the organization to take on the surface area that’s really not part of Nansen’s core strategy.”

The second explanation for the layoffs, according to Svanevik, was a bad year for the cryptocurrency markets. Nansen’s cost base remained very high in comparison to the company’s present position despite attempts to diversify income sources via business and institutional clients. He said that even though the firm has “several years of runway,” its “priority is to establish a sustainable business.”

Other Similar Layoffs in the Industry

Mass layoffs are still a problem for the cryptocurrency sector, although they have drastically decreased recently. A second significant round of layoffs will begin in 2023, with leading cryptocurrency exchange Coinbase getting rid of another 20% of its workforce.

On January 10, Coinbase CEO Brian Armstrong made it public that the exchange will eliminate 950 positions as part of its efforts to slash operational expenses by around 25% in the midst of the continuing crypto winter.

Although Armstrong highlighted that Coinbase is “well capitalized” and that cryptocurrency “isn’t going anywhere,” the company must continue with layoffs to maintain “appropriate operational efficiency.” As part of a personnel reduction, Coinbase would discontinue a number of initiatives with a “lower probability of success,” the CEO said, without mentioning the projects that will be canceled.

The company’s 8-K form filing with the US Securities and Exchange Commission, which is attached to Coinbase’s blog release, indicates that Coinbase’s audited accounting records for 2022 are not yet available.

In order to reduce operating costs, Coinbase plans to spend between $149 million and $163 million, including between $58 million and $68 million in cash for employee severance and other termination benefits. According to the filing, the Company anticipates that the plan’s implementation will be mostly finished by the second quarter of 2023.

At businesses operated by the cryptocurrency venture capital company Digital Currency Group (DCG), hundreds of employees have lost their jobs as the lengthy crypto winter—made colder by the FTX collapse—continues to damage the industry.

The London-based cryptocurrency exchange Luno announced on January 25 a decrease of 35% in its workforce, letting go of close to 330 specialists owing to turbulence in the IT and cryptocurrency industries, which influenced the company’s overall growth and revenue data. This was in the middle of recent layoffs.