There will be 50% of Bitmain’s employee cut off before BTC halving occurs
Major Bitcoin mining Bitmain reportedly has plans to reduce its workforce by 50%.
The reason for the Bitmain’s layoffs
On Jan. 2, a Chinese press reported that Bitcoin mining tool maker Bitmain has planned a private optimization plan that will layoff a massive portion of its staff before the next Bitcoin halving, which is expected to occur in May. Co-founder of Bitmain, Jihan Wu held a related meeting and asked all department managers to submit an optimized list.
Bitmain will hold an annual meeting on January 17, and it is expected that the layoffs will have been completed before that date. Insiders of Bitmain revealed that the company is now operating normally and the cash flow is healthy. The optimization is only a “slimming plan” to halve, and it is also a corrective move for the original chairman’s business expansion.
Bitmain employees said that the business had already found a joint venture but was rejected by the original chairman, which was one of the reasons for the optimization. Bitmain insiders said that the optimization is also a corrective move for the former chairman’s arbitrary expansion of business and free use of funds.
People who are too familiar with this matter claim that the reason for the layoffs is because the upcoming Bitcoin halving, which will decrease the number of new coins awarded to miners by half. Dovey Wan, the co-founder of Primitive Ventures, called these layoffs as the “first halving of 2020.” Meanwhile, Antminer s17 series products are being shipped on a large scale, replacing the s9 close to the shutdown price.
In December 2018, Bitmain already had a massive layoff round, which also impacted around 50 percent of its employees. Bitmain said at the time that the layoffs affair was part of creating a sustainable business and double down on hiring the best talent from a diverse range of backgrounds.
Bitmain has legal troubles again
Lately, the Shenzhen Bao’An District Court in China had ordered to freeze 4,718,710.68 yuan ($676,000) of Bitmain’s subsidiary company, Shenzhen Century Cloud Core. Dongguan Yongjiang Electronics, a manufacturer of electronic components, was the one who applied and asked the court to freeze the amount in order to ensure that it would be able to claim it in an ongoing trade contract dispute. However, Shenzhen Century Cloud Core has the right to appeal the decision if they want.
We do not know how long the freeze will be in effect. Based on Chinese laws, freezing of bank accounts and other stores of funds, in general, should be no longer than six months. However, current or liquid assets should not be held in custody for more than a year.
Executives’ “civil war”
Jihan Wu, who is Bitmain co-founder and tech billionaire, recently reappeared at the leader of Bitmain after he had ousted fellow co-founder Micree Zhan Ketuan from the firm in October. Zhan claimed that he was removed as a legal representative of the company without his consent after Jihan Wu had sent out an email that stated that Zhan had left the company.
Jihan Wu, Co-Founder & CEO of Bitmain | Image via Bloomberg.
In the email with the title “important notice” sent to all staff, Mr. Wu wrote that as the co-founder, chairman, legal representative, and executive director of Bitmain, he decided to dismiss Zhan Ketuan from all his roles in the company. The market was showing support for the company’s decision, in which the price of bitcoin cash (BTC) increased by nearly 10% in the past 24 hours.
Zhan claimed that he will return through legal methods to end this very critical moment as soon as possible. One year before, Jian Wu suddenly abandoned his position as the CEO of Bitmain, transferring to a non-executive role on the company’s board.