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Nansen, a prominent player in blockchain analytics, has announced plans to downsize its team by nearly one-third. Alex Svanevik, the company's CEO, took to social media on May 30 to share this difficult decision, confirming a significant reduction in Nansen's workforce.
Svanevik cited several factors that contributed to this strategic shift. The rapid growth and expansion experienced by the company in its early years led to a diversification of roles that did not align with its core mission. Furthermore, the challenging conditions of the cryptocurrency market also played a significant role. Despite Nansen's attempts to diversify revenue streams through collaborations with enterprise and institutional customers, the relatively high operational costs remained a challenge, considering the company's current market position. Svanevik mentioned the importance of creating a sustainable long-term business model, even though they had sufficient financial resources to sustain operations.
As part of the downsizing, affected employees will receive compensation as part of their severance package. Unfortunately, layoffs have become a familiar occurrence in the cryptocurrency industry, although there has been a decrease in such actions in recent months.
Earlier this year, in January, popular cryptocurrency exchange Coinbase reduced its workforce by 20%, resulting in the loss of 950 positions. This move aimed to reduce operational expenses by 25% due to the prolonged unfavorable climate in the cryptocurrency market.
Similarly, at the beginning of the year, companies under the Digital Currency Group (DCG), a crypto-focused venture capital firm, made the difficult decision to lay off over 500 employees. This action was a direct response to the market downturn, further exacerbated by the significant decline of FTX.
The downsizing at Nansen reflects the challenges faced by companies in the crypto industry, highlighting the need to adapt and ensure long-term sustainability amidst market fluctuations.
