Bitmain’s problems continue, as the world’s largest bitcoin mining firm has announced a fresh round of layoffs. Bitmain is rumored to have lost over $700 ...
Bitmain’s problems continue, as the world’s largest bitcoin mining firm has announced a fresh round of layoffs.
Bitmain is rumored to have lost over $700 million in Q4 2018, and late last month reports broke out that the Chinese mining giant is set to fire 50% of its workforce. Later, the company shut down its Israeli branch and fired all of its employees. Meanwhile, Chinese media reported that Bitmain CEOs Jihan Wu and Micree Zhan are set to step down.
According to a report from Texas Republic Radio, Bitmain has suspended its operations in Rockdale, a former coal-mining town located east of Austin. Announced last year, the Rockdale data center was set to become the largest cryptocurrency mining operation in the US. All of the firm’s employees, other than two engineers and the director of human relations, were fired. Bitmain spent millions of dollars in renovating the buildings and had nearly 7,000 to 8,000 miners out there already.
An unhappy Milam County Judge Steve Young said:
I’m really disappointed because we had advertised this. We had waited for this. We had wanted this. We had welcomed this. This was huge, we need some positive news here. We need some jobs here. We need tax base here and this was a step in the right direction.
Back in July 2018, when Bitmain made the announcement, bitcoin was trading at $8,000. Now it is less than half that price. The company had expected to invest $500 million in the facility and create 400 new jobs.
A spokesperson said:
The right-sized team at Rockdale now has the expertise to re-start the project at small scale anytime. Bitmain would like to ramp up the site at a slower pace and scale based on market conditions.
Cheap electricity in Milam County and the industrial infrastructure at Alcoa property made it attractive for Bitmain’s mining operations. Rockdale City Manager Chris Whittaker remains optimistic that Bitmain will be back on its feet soon and bring the large scale mining operation that the company had originally promised.
After Israel, Bitmain has now shut down its office in Amsterdam as a part of its downsizing. This office mainly focused on operations and development of its mining pool and crypto wallet, BTC.com. While the firm has decided to shut down this office, it does not have an official timeline yet.
Cited in CoinDesk, a Bitmain spokesperson said:
As we build a long-term, sustainable and scalable business, we are making adjustments to our staff and operations. This includes the decision to close our Amsterdam and Israel offices. We are really focusing on things that are core to our mission and not things that are auxiliary. We will continue to hire the best talent from a diverse range of backgrounds.
As Bitmain continues to struggle with its finances, it has reportedly failed to convince Hong Kong regulators to approve its IPO application.
Once touted as the largest IPO in crypto industry history, the offering was expected to raise $3 billion. However, Hong Kong regulators are not ready to let any crypto business raise funds through an IPO before proper regulations are in place. Nothing seems to go right for the bitcoin mining giant these days, and its fallout could affect the entire crypto market.
Featured Image from Bitmain