Bitmain and Huobi Plan Layoffs as Cryptocurrency Crunch Begins to Bite

Two of the world’s biggest cryptocurrency companies have confirmed lay-off plans amid an industry crunch that has seen US$170 billion wiped off bitcoin’s market value this year. Beijing-based Bitmain Technology, the world’s biggest maker of cryptocurrency mining rigs, said in a statement that the company is undergoing “some adjustment to our staff this year” as it continues to build a sustainable business, following reports on Chinese social media that it was planning 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.

A Bitmain spokesman on Wednesday denied rumours on Chinese social media that the company will sack more than half of its employees, but declined to specify exactly how many lay-offs are planned.

Meanwhile, a spokeswoman for Huobi Group, operator of one of the world’s biggest cryptocurrency exchanges, said on Wednesday that the company is “optimising staffing” by cutting its worst-performing employees. But she added that the Beijing-based firm is still hiring people for its core businesses and emerging markets.

The planned lay-offs come amid a prolonged bear market in cryptocurrencies. This year bitcoin, the world’s biggest form of digital money, has fallen more than 70 per cent in value. In total, nearly US$500 billion has been wiped off the value of the more than 2,000 cryptocurrencies available in the market.

Both companies declined to quantify the number of job losses planned. By the end of June, Bitmain had a total of 2,594 full-time employees including some 840 engineers, according to a company filing to the Hong Kong stock exchange. Huobi has more than 1,000 employees.

Earlier this month Bitmain closed its research center in Israel, which had over 20 staffers.

The actions by Bitmain and Huobi follow similar moves by other industry players such as blockchain-based social network Steemit as well as ConsenSys, a software production studio, which is letting go of 13 per cent of its 1,000-strong staff globally.