Chainalysis Inc., a company that provides analytical data about cryptocurrency transactions for governments and banks to detect illicit activity, confirmed late Wednesday that the company intends to lay off less than 5% of its 900 employees as part of a reorganization.

The company’s senior director of communications Maddie Kennedy told SiliconANGLE in an emailed statement that the “reorganization” will primarily impact its “go-to-market” team, which is largely staffed by sales and marketing. Many of those employees will be moved to different areas of the company with new roles and some will be let go.

“As a part of this reorg, some folks will have new roles, responsibilities, and reporting lines,” said Kennedy. “Unfortunately we will also part ways with some incredibly talented people within our team.”

This news comes in the wake of numerous other companies that have been laying off employees amid depressed crypto markets in 2022 after a boom cycle in 2021. Markets were especially tumultuous after the dramatic collapse and bankruptcy of the crypto exchange FTX Trading Ltd. Other companies announcing layoffs at the beginning of 2023 included the crypto exchanges Coinbase Inc., Gemini, Luno and Crypto.com.

Many of these companies cited hiring too quickly during the crypto boom cycle and heavily reduced demand for cryptocurrency services and falling trading volumes. These conditions would most likely affect Chainalysis as it relies heavily on transaction volumes and demand to support its revenue model.

New York-based Chainalysis tracks more than $1 trillion worth of cryptocurrency transactions every month with the aim of providing analytical data from blockchain platforms to assist with the prevention of money laundering and cybercrime.

The company works with financial institutions such as banks to provide services that allow them to comply with transaction tracking regulations and for government entities such as the Securities and Exchange Commission and the Federal Bureau of Investigation to track criminal activity.

The company’s business model has garnered significant investor attention and it raised $170 million in a Series F funding round in May that doubled the company’s valuation to $8.6 billion.

In spite of this news, Kennedy said that the company is “well capitalized” and intends to move forward into 2023 with a “refocused strategy” and it will continue to hire and build out its teams.

Image: Production Perig