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Bitmain 50% layoff coming before next halving

Bitmain 50% layoff coming before next halving
By We Play Coins
Added on Jan 03, 2020

Bitmain 50% layoff coming before next halving according to a report by the chinese media. In a report by cointelegraph, the world’s largest producer of cryptocurrency mining devices is reportedly restructuring. The purported reason for restructuring seems to be the upcoming bitcoin halving event. It refers to the long term possibility of a business model based on mining. Mining is a temporary step that will be phased out according to the larger plan of the bitcoin network.

Because the number of bitcoins created each time a user discovers a new block – the block reward – is halved based on a fixed interval of blocks, and the time it takes on average to discover a block can vary based on mining power and the network difficulty, the exact time when the block reward is halved can vary as well. Consequently, the time the last Bitcoin will be created will also vary, and is subject to speculation based on assumptions.

If the mining power had remained constant since the first Bitcoin was mined, the last Bitcoin would have been mined somewhere near October 8th, 2140. Due to the mining power having increased overall over time, as of block 367,500 – assuming mining power remained constant from that block forward – the last Bitcoin will be mined on May 7th, 2140.

Cryptocurrency mining giant Bitmain reportedly has plans to reduce its workforce by another fifty percent.

On Dec. 2, Chinese news media outlet Wushuo Blockchain reported that Bitcoin (BTC) mining rig maker Bitmain has launched a “personnel optimization plan” that will layoff a significant portion of its employees before the next BTC halving, which is expected in May.

The world’s largest producer of cryptocurrency mining machines will reportedly hold an annual meeting on January 17, and it is expected that the layoffs will have been completed before that date.

People familiar with the matter assume that the reason for the layoffs is the upcoming Bitcoin halving, which will cut the number of new coins awarded to miners by half. Dovey Wan, co-founder of Primitive Ventures, wittily dubbed the Bitmain layoffs as the “first halving of 2020.”

In December 2018, Bitmain already endured a massive layoff round, which also impacted around 50 percent of its employees. Bitmain said at the time that the layoffs were part of building a sustainable business and that they would continue to double down on hiring the best talent from a diverse range of backgrounds.

Cointelegraph contacted Bitmain regarding these latest developments but had yet to receive a response as of press time. This article will be updated if new comments come in.

Bitmain’s legal troubles continue

Recently, the Shenzhen Bao’An District Court in China had ordered to freeze 4,718,710.68 yuan ($676,000) of Bitmain’s wholly-owned subsidiary, Shenzhen Century Cloud Core. The ruling followed an application submitted by a manufacturer of electronic components, Dongguan Yongjiang Electronics, who asked the court to freeze the amount in order to ensure that it would be able to claim it in an ongoing trade contract dispute.

Executives take aim at each other

Bitmain co-founder and tech billionaire Wu Jihan recently resurfaced at the helm of Bitmain after he had ousted fellow co-founder Micree Zhan from the firm in October. Zhan claimed that he was removed as a legal representative of the company without his consent after Wu Jihan had sent out an email which stated that Zhan had left the company.

One year before, Wu suddenly abandoned his post as CEO of Bitmain, moving into a non-executive role on the company’s board.