More crypto companies are apparently letting a significant number of their workforce go, a further sign that the cryptocurrency bear markets are not ready to allow blockchain startups to thrive again at this time.
One of the world’s largest cryptocurrency exchanges, Huobi, and Chinese Bitcoin mining giant Bitmain Technologies, have reportedly laid off an undisclosed number of their staff. Both companies confirmed the news but refused to comment on the exact number of employees that have been dismissed.
The confirmation of staff reductions at the giant crypto miner follows speculation, rumors, and posts on social networks that Bitmain will sack almost half of its staffers by the end of this week. A Bitmain spokesman denied that the company would lay off this vast percentage of its workforce, but declined to specify the exact number of planned job cuts.
“A part of that is having to really focus on things that are core to that mission and not things that are auxiliary. As we move into the new year we will continue to double down on hiring the best talent from a diverse range of backgrounds,” said Bitmain in the statement.
Bitmain’s IPO prospectus shows that the company has a headcount of around 2,600 employees, with more than 1,500 people dedicated to research and product management, 535 to mining business and nearly 550 to front-line operations such as client support and sales.
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Questions over the sustainability of Bitmain’s future have been surfaced on BitMEX’s first ‘unboxing’ report following its IPO leaked disclosures.
According to a prospectus for its Hong Kong IPO, Bitmain received massive pre-orders for their latest Antminer at the peak of the bull market in late 2017. But after it spent a few months to manufacture and ship its chips, the gear has slowed as lower crypto prices, and lack of miner innovation compared to its rivals, have kept orders extremely soft in 2018.
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In a similar vein, it has become clear that cryptocurrency exchange Huobi will be doing more than simply restructuring, as it announced before, but instead will be laying off more employees. A spokeswoman said today the company is “optimising staffing by cutting its worst-performing employees.”
Founded in China and headquartered in Singapore, Huobi is currently the third largest exchange in the world, settling about $650 million worth of volume over the past 24 hours.
In an attempt to capture more of the global exchange volume, Huobi has been opening up international offices around the world. Earlier this year, Huobi announced that they would be opening a new office and support center in London as it continues its expansion overseas.
Bitmain and Huobi are the latest cryptocurrency-linked firm said to have run into financial trouble as cryptocurrency prices struggle to recover from a steep decline throughout 2018. Other cryptocurrency operators have been laying off large swathes of their workforces over the past few months as the market crash hits businesses.