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Bitmain, a prominent Bitcoin application-specific integrated circuit (ASIC) manufacturer, has reportedly suspended salary payments for its employees starting from September, according to a recent report from Leiphone, a technology information service platform based in China.
Multiple Bitmain employees, who wished to remain anonymous, have disclosed that the company has also cut all "bonuses and incentives" for its staff. The report details how Bitmain has not disbursed remuneration due since the previous month, adding to the financial strain faced by its employees. To compound the matter, employees are now grappling with a 50% reduction in their base salary.
A message that was purportedly disclosed from Bitmain's management stated:
"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]"
Founded in Beijing, China, in 2013, Bitmain once held a dominant position as one of the world's largest Bitcoin (BTC) mining ASIC manufacturers, boasting an estimated 70% market share during its peak. The firm's Antminer ASIC series has consistently led the industry in hash rate computations for mining Bitcoin.
Recently, former Bitcoin mining firm Hive announced its acquisition of 2,000 Bitmain S19 XP ASIC miners for immediate deployment in its mining operations. Hive has since pivoted to AI and Web3 from its previous mining focus. The S19XP ASIC miners are currently listed on Bitmain's website for $4,653 each. Hive anticipates that following the integration of these miners, its mining rigs will yield a combined revenue of $80 per megawatt-hour, which accounts for both the newly acquired Bitmain models and older hardware.
In 2021, Bitmain's co-founder, Jihan Wu, finalized a year-long ownership dispute with fellow co-founder Micree Zhan. The agreement stipulated that Wu would step down from his roles as chairman and CEO of Bitmain and sell his ownership stake to Zhan for a sum of $600 million. Back then, Bitmain had ambitious plans for an initial public offering, targeting a valuation of $5 billion by late 2022. These plans, however, appear to have been put on hold due to the ongoing bearish market conditions.
Bitmain's recent financial difficulties come in the wake of similar challenges faced by other companies in the industry. Chainalysis, two prominent crypto firms (blockchain hardware and blockchain security/analytics, respectively), have recently announced layoffs, citing shifting market dynamics and the need to adapt to changing industry conditions.
