Bitmain Suspends Salary Payments and Cuts Bonuses for Employees
Bitmain, a leading Bitcoin ASIC manufacturer, has reportedly halted salary payments for its employees starting from September, according to a recent report from Leiphone, a Chinese technology information service platform.
Several anonymous Bitmain employees have revealed that the company has also eliminated all bonuses and incentives. This non-payment of wages since the previous month has added financial pressure on the staff, who are now facing a 50% reduction in their base salary.
“For the month of September, the company has yet to achieve a net positive cash flow, especially in the orders of [new] ASICs. The Executive Management Team therefore decided that salaries for the month of September will be paused, to be reviewed after October 7 after [the] holiday. [sic]”
Bitmain’s Dominance and Recent Challenges
Founded in Beijing in 2013, Bitmain was once a dominant force as one of the world’s largest Bitcoin mining ASIC manufacturers, with an estimated 70% market share at its peak. The firm’s Antminer ASIC series was renowned for its high hash rate computations.
In contrast to Bitmain’s current struggles, former mining firm Hive recently acquired 2,000 Bitmain S19 XP ASIC miners for its operations. Hive plans to integrate these miners alongside their existing hardware to generate significant revenue.
Ownership Dispute and Market Conditions
In 2021, Bitmain’s co-founder Jihan Wu settled a year-long ownership dispute with co-founder Micree Zhan. As part of the agreement, Wu stepped down from his positions as chairman and CEO and sold his ownership stake to Zhan for $600 million. Bitmain had ambitious plans for an IPO with a target valuation of $5 billion by late 2022, but these plans have been postponed due to the bearish market conditions.
Industry Challenges
Bitmain’s financial difficulties reflect the struggles faced by other companies in the crypto industry. Ledger and Chainalysis, prominent blockchain hardware and security/analytics firms respectively, have recently announced layoffs in response to changing market dynamics and the need to adapt to industry conditions.
Hot Take: Bitmain Faces Financial Crisis Leading to Salary Suspension
Bitmain, a major ASIC manufacturer, has halted salary payments for its employees since September and cut bonuses, adding to the financial strain on its staff. The company attributes this decision to a lack of positive cash flow, particularly in ASIC orders. Bitmain’s dominance in the Bitcoin mining industry has waned over time, while former mining firm Hive recently acquired Bitmain miners for its operations. Bitmain’s co-founder settled an ownership dispute but had to put IPO plans on hold due to market conditions. This situation reflects challenges faced by other crypto companies like Ledger and Chainalysis. Bitmain’s financial crisis underscores the volatile nature of the crypto industry.
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