Numerous companies are still suffering from the crypto bear market. Popular blockchain analysis firm Nansen has announced a significant reduction in employees in order to stay afloat. On May 30, CEO Alex Svanevik disclosed an “extremely difficult decision” to scale back the company’s workforce. He announced that 30% of employees will be laid off. Nansen is the latest firm to join the long list of companies that have let go of employees due to harsh market conditions.
Svanevik gave two primary reasons for the crypto firm reducing its staff. First of all, he claimed that the business expanded too quickly in its early years of operation. Second, he claimed that the cryptocurrency markets have had a “brutal” year since 2022. Svanevik said that the firm’s “cost base is too high relative to where the company is today.”
According to Svanevik, Nansen has “several years of runway,” but only if it can become sustainable. He explained that achieving sustainability entails “reducing our surface area” to a smaller Nansen crew.
Are crypto firms still suffering from the 2022 crash?
The crypto markets have rallied by almost 45% in 2023. Bitcoin (BTC) alone has rallied by almost 70%. However, some firms like Nansen continue to suffer. Does it reflect the sentiment of the entire industry? According to DeveloperReport, the number of active developers has been falling since November 2022, i.e. right after the FTX collapse.
Furthermore, the number of developers has dropped by 13% over the last year. However, in the last 2 years, the metric has gone up by 43%. While in the last 3 years, it has gone up by 110%.
According to the data, it is clear that the number of active developers is down. This is not surprising given the number of firms that have shut down and the high amount of lay-offs. However, several crypto firms such as Binance, Kraken, and Ripple continued to hire despite harsh market conditions. Nonetheless, there is no denying the impact the 2022 crash has had on tech firms.