Two of the largest cryptocurrency companies in the world have confirmed plans for dismissal amid a sector crisis that has seen $ 170 billion wiped out the bitcoin market value this year.
Bitmain Technology, headquartered in Beijing, the world's largest producer of cryptocurrency mining platforms, said in a statement that the company is undergoing "some adjustments for our staff this year" as it continues to build a sustainable business, following reports on Chinese social media that was planning job cuts.
"Part of this is having to really focus on things that are fundamental to that mission and not on things that are auxiliary." As we enter the new year, we will continue to double the hiring of the best talent from a wide range of backgrounds, " called Bitmain in the declaration.
A spokesman for Bitmain on Wednesday denied rumors about Chinese social media that the company will fire more than half of its employees, but refused to specify exactly how many layoffs are expected.
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Meanwhile, a spokesperson for Huobi Group, operator of one of the world's largest cryptocurrency exchanges, said today that the company is "optimizing staff" by cutting its worst employees. But he added that the Beijing-based company is still hiring people for its core businesses and emerging markets.
The planned redundancies come in the middle of a prolonged bearish cryptocurrency market. Bitcoin, the world's largest digital currency, has lost more than 70% of its value this year. In total, almost $ 500 billion was wiped out by the value of over 2,000 cryptocurrencies available on the market.
Both companies have refused to quantify the number of planned job losses. At the end of June, Bitmain had a total of 2,594 full-time employees, including around 840 engineers, according to a company that presented on 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 staff members.
The actions of Bitmain and Huobi follow similar moves from other players in the industry, such as Steemit, the blockchain-based social network, as well as ConsenSys, a software production studio, which is letting 13% of its 1,000 employees go the world.
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A Bitmain employee, based in Beijing, who asked not to be identified because the information is not public, said the layoffs will be distributed across most of the Bitmain divisions, but the person was unaware of the exact number of losses of planned jobs.
Chinese companies Bitmain, Canaan and Ebang – the world's top three computer suppliers used to create new digital money units – have proposed all initial public offers in Hong Kong this year. The market operator and the stock exchange operator of the city, however, are reluctant to approve the IPOs for any cryptocurrency business citing the lack of regulations in the sector, according to a previous report that cites familiar people with the situation.
Canaan allowed his IPO application to expire. Last week Ebang renewed its application with updated financial information stating that it saw "significant decreases" in revenue and gross profit in the third quarter.
"Downsizing is a natural cycle in new fast-growing industries, and unfortunately blockchain is no exception," said Jehan Chu, co-founder of Hong Kong's blockchain investment company Kenetic Capital, who declined to comment on hiring plans of his company.
"We saw this with the Internet in the early 2000s, but that period also gave rise to the biggest companies in space today, and I look forward to a clearer and more focused 2.0 version of the blockchain industry," he said.