22.09.2019

Bitcoin Mining Giant Bitmain will lay off Staff as Hong Kong IPO Stalls

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Bitmain’s statement read:

“There has been some adjustment to our staff this year as we continue to build a long-term, sustainable and scalable business. A part of that is having to really focus on things that are core to that mission and not things that are auxiliary.”

Bitcoin Mining Giant Bitmain will lay off Staff as Hong Kong IPO Stalls

Beijing-based bitcoin mining giant Bitmain has confirmed that it will lay off some of its workers as it carries out some business adjustments. This comes after a prolong crash in cryptocurrency markets that have seen bitcoin lose more than 80 percent of its value since its all-time high last December.

The company released the statement on Tuesday after reports of an impending lay off circulated through local Chinese news outlets. The reports cited discussions on social networking site MaiMai where a verified Bitmain staff alluded to plans by the company to cut as much as half of its entire workforce.

A Bitmain staff had replied, “It’s affirmative. The layoff will start next week and involves more than 50 percent of the entire Bitmain’s headcount,” and another added, “Some departments have to be let go entirely.” The claimed the layoff was to begin just before Christmas.

According to Crypto news site Coindesk, a Bitmain staff confirmed that the layoff process has actually started and is still ongoing. The staff, who did not disclose his identity, did not confirm the number of staff affected or whether 50 percent of the staff will be laid off per earlier reports.

“The whole thing certainly couldn’t be handled in just one day given the total number could be large…” the source was quoted as saying. He explained that whole departments which are dispensable may be disbanded. “It’s not hard to infer which division is suffering the most,” he said, “Bitmain’s core business is making miners. Other business lines are just blockchain and artificial intelligence.”  

Bitmain had it coming

The news of the layoff—though shocking—hardly came as a surprise at least to insiders in the company. Earlier in the month, the firm closed its operations in Israel just 2 years after it was established. The news meant that the entire Bitmain Israel staff—numbering up to 23 people—were disengaged from the company.

Coupled with the delays that have faced its IPO application, the company reported accrued heavy losses in the third quarter of this year. According leaked data, the company reportedly experienced its worse quarterly returns posting a heavy $740 million loss. The authenticity of the data was, however, not verified although a significant drop in revenue was anticipated as bitcoin price spiraled downward and just like the demand for specialized mining rigs.

The Bitmain staff who spoke to Coindesk explained that the adjustment was on the cards citing the company’s extraordinarily fast expansion that have seen it triple its staff strength since the start of year.

He said:

“Now Bitmain has about 3,100 people, even several hundreds more than what was disclosed in the IPO prospectus in September. But there were only about 1,000 people at the beginning of the year”

2018 Crypto crash is taking its Toll

Another crypto-focused business that have made adjustments recently is ConsenSys, best described as the ethereum studio. Interestingly, ConsenSys also witnessed fast expansion as it took on several promising blockchain projects.

ConsenSys’ boss Joe Lubin, who is the co-creator of Ethereum, explained confirmed layoffs as part of an internal restructuring to meet the demands of a “mature” cryptocurrency space.

Cryptocurrency exchange Huobi is also planning layoffs as a representative confirmed to South China Morning Post that the company is “optimizing staffing” ” by cutting its worst-performing employees.

Though crypto market had a brief rally in the run up to Christmas, a Christmas selloff has seen the total crypto market cap drop to $129 billion all but killing hopes of a magical end to the year.

Despite the downturn and the layoffs, both Bitmain and Huobi reiterated the commitment to attracting top talents to join their ranks.

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