On Tuesday (25 December 2018), according to a report in Coindesk, Chinese crypto mining giant Bitmain confirmed that it is restructuring itself in order to "build a long-term, sustainable and scalable business."
In a statement given to Coindesk, a Bitmain representative said:
“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."
Although there have been rumors (many by Twitter user "btcking555") on social media about Bitmain being in financial trouble ever since reports surfaced back in August about the company's plans for an Initial Public Offering (IPO) on the Hong Kong Stock Exchange, it was not until Sunday (December 23rd) that we heard about a post in Chinese site Maimai (similar in purpose to LinkedIn) discussing layoffs at Bitmain. This post came to our attention via the following tweets by Dovey Wan, a Founding Partner at Primitive Ventures, a crypto-focused investment fund:
⚠️⚠️⚠️— Dovey Wan 🦖 (@DoveyWan) December 23, 2018
there’s post on Chinese Linkedin (usually very high accuracy, posted by employees themselves) saying Bitmain will start a layoff the coming week ... 😳😳😳
A separate rumor said the plan is for more than 50% of its headcount ???! pic.twitter.com/b0ZSBuPX4d
Then, later that day, Samsow Mow, the Chief Strategy Officer at Blockstream tweeted:
Bitmain has quietly laid off their entire Copernicus team (#Bcash GO client). Only 1 week notice. Some had just joined the company. Layoffs just in time for Christmas. #BitmainIPO @HKEXGroup @SCMPNews pic.twitter.com/Kt2Ce90sBW— Samson Mow (@Excellion) December 23, 2018
Not many were surprised to hear that there may be upcoming layoffs at Bitmain since on December 10th Israeli business news out let Globes had reported that Bitmain was about to close a development center it had set up two years in the Israeli city of Ra'anana and lay off all 23 local employees. What is shocking, though, is that these latest rumors are saying that some departments might get completely closed or have their staff counts reduced by more than 50%.
On December 24th, Dovey Wan explained via another tweet via it was so difficult to search Chinese social media to get more information about these alleged layoffs:
There lots of Chinese coverages already feel free to verify.— Dovey Wan 🦖 (@DoveyWan) December 24, 2018
PS. Lots of early messages are from wechat/zhihu/weibo/xinqiu/maimai that are not openly searchable even via Baidu in Chinese, that makes China local news difficult to propagate outside (thanks to GFW too) 🧐
Apparently, one verified Bitmain staff member posted the following reply to the aforementioned thread in Maimai: "It’s affirmative. The layoff will start next week and involves more than 50 percent of the entire Bitmain’s headcount."
Coindesk says that one anonymous source who is a Bitmain employee confirmed to them that layoffs are currently taking place, but that it was hard to ascertain at this stage exactly what percentage of the staff would be let go:
"This is an operational adjustment. Some projects will be entirely gone so it’s hard to calculate a precise percentage at this stage... It’s not hard to infer which division is suffering the most. Bitmain’s core business is making miners. Other business lines are just blockchain and artificial intelligence... There’s also some adjustment on the mining equipment business line. For the firm as a whole, it’s going to reduce redundancy to increase operational efficiency."
The same source added that even if there had not been declining cryptocurrency prices this year, it was almost inevitable that there would be layoffs at some point given the very rapid growth in employee count that Bitmain experienced during the year:
“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."
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