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Bitcoin Halving Pushes Bitmain to Trim Workforce Further

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Bitmain, the largest manufacturer of cryptocurrency mining equipment, seems to be gearing up for a massive layoff entering the new year. The latest news of a massive layoff at the company was reported on December 2, 2019, by Chinese industry news source Wushuo Blockchain. At the time, the report claimed that the Chinese mining giant had opened a “personnel optimization plan” to lay off a significant portion of its workforce before the next Bitcoin halving. 

The rumors have held long since then, and reports are now suggesting that the layoffs could be completed by the company’s next annual meeting on January 17. Anonymous sources believe the layoffs are necessitated by the halving, which is expected to take place in May 2020.

Dovey Wan, the co-founder of blockchain investment firm Primitive Ventures, explained via Twitter on Wednesday that the company is looking to cut its staff by the Chinese New Year (January 25, that is), wittingly dubbing the move the “first halving of 2020.”

Layoffs Aren’t New to Bitmain 

Of course, this isn’t the first time that Bitmain would be cutting its workforce. In December 2018, the South China Morning Post (SCMP) reported that the company was working towards relieving over half of its workforce, as it had suffered a significant loss in profits as a result of the crypto winter that engulfed the entire market that year.

“A part of [building a sustainable business] 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,” a spokesperson for the company reportedly said at the time.

A week before that, the company was reported to have let go of its entire Bitcoin Cash development team. The developers- about 50 of them- formed the company’s Copernicus team, and were responsible for building its Bitcoin Cash GO client. As Blockstream Chief Security Officer Samson Mow reported at the time, some of them had only just joined the company for a week. 

A Company in Disarray

The reports of layoffs have continued to place Bitmain in a bit of an uncertain spot. The company had elements of a great year in 2019, as it launched its mining facility in Texas and has reportedly pushed forward in its mission to file for an Initial Public Offering (IPO). However, it has also struggled on several fronts as well. 

For one, the Bitcoin price took a significant hit towards the end of last year, and was unable to end the year trading even close to the $10,000 comfort level. The reduction in Bitcoin’s profitability has led the company to try several initiatives to boost sales, including providing limited price guarantees to buyers who purchase in bulk and renting out its second-tier miners under profit-sharing agreements. 

Then, Bitmain has found itself amid some terrible organizational troubles. Its former co-CEOs Jihan Wu and Ketuan Zhan, are gearing up for a legal battle after Wu ousted Zhan from the company in October.

Last month, the Shenzhen Bao’An District Court in China ruled to freeze about $676,000 in assets belonging to Shenzhen Cloud Core, one of Bitmain’s subsidiaries, as a result of a trade contract conflict with one of its clients (Dongguan Yongjiang Electronics).

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