Bitmain, the Chinese mining hardware producer who recently applied for listing on the Hong Kong Stock Exchange, fired about half of its employees, the company confirmed in a statement:
"There have been some adjustments for our staff this year as we continue to build a long-term, sustainable and scalable business, part of this is focusing on the things that are critical to that mission and not on those that are auxiliary. ".
A discussion on layoffs he had started on Maimai, a Chinese site similar to LinkedIn, December 17, reports Altcointoday. Since then, the post has collected around 200 responses, some of which also come from Bitmain employees. There, a verified employee revealed that "the dismissal will start next week and involve more than 50% of the entire Bitmain [sic] organic."
"Some departments must be left completely," another employee said.
An anonymous source of Bitmain China told CoinDesk that "the whole thing can not be managed in a single day, since the total number could be large." The source continues, stating that "this is an operational adjustment, some projects will be completely eliminated, so it is difficult to calculate a precise percentage at this stage."
Interestingly, these changes are not based only on the bear market, the source reports. Due to the rapid expansion of Bitmain this year, they would still have to reorganize at some point.
This could mean the potential fall of Bitcoin Cash and Litecoin according to venture capitalist Kyle Samani, reports CCN.
Suggested reading : Discover the best Bitcoin Cash and Litecoin wallets here and here.
Fight to stay afloat
The reason for Samani's prediction is that Bitmain may be short of money, and the group may not be able to afford to stay afloat. So, to stay in business, Bitmain may have to sell its large holdings in BCH and LTC he tweeted Samani:
This is extremely bearish for BCH and LTC
The only reason to make such drastic cuts is because you're running out of money
In the meantime, they still have 1 BCH and 1M LTC on their balance sheet. These will soon be liquidated to keep the lights on https://t.co/kneSRcK2li
– Kyle Samani (@KyleSamani) December 26, 2018
The analysis of the VC is partly based on an allegedly Bitmain financial report leaked in August of this year. If the numbers are to be believed, this would mean that Bitmain holds approximately 931,000 LTC and 1 million BCH, worth approximately $ 28.6 million in Litecoin and $ 177 million in Bitcoin Cash.
The document also shows Bitmain which holds Bitcoin (BTC), Dash (DASH) and Ethereum (ETH) in its portfolio. Their holdings are presumably $ 84 million, $ 26 million and $ 142,000, respectively. If they have retained their holdings since August, Bitmain holds approximately $ 316 million in cryptocurrencies.
If you believe these reports, Bitmain has freed himself of the entire Copernicus team – a group that is developing a new Bitcoin Cash client. Some of these members had just joined the company and reportedly had been fired just in time for Christmas, reports CCN.
From bad to worse
BitMex Research also reported potential losses for Bitmain in the second quarter of this year, despite the success of the first quarter.
If the company really holds everything that is said in BCH and LTC, we can expect investors to be wary of the future of their digital holdings. However, we might also expect Bitmain's layoffs to potentially straighten the ship, at least for now. As of now, the group still holds over 60% of the cryptocurrency mining market.
The CoinDesk source states that these layoffs are affecting all divisions of the company, with mining that sees the greatest damage:
"It is not difficult to deduce which division is the most suffering: Bitmain's core business is mining, and other lines of business are just blockchain and artificial intelligence."
Bitmain is not the only cryptocurrency group to undergo re-adaptations. ConsenSys and Steemit are two other important spaces that also suffer because of the bear market. Bitmain is still hiring, however.