A Beijing-based Bitcoin mining company, Bitmain, is reportedly facing financial challenges, leading to a suspension of salary payments to its employees until at least September.
According to local media reports, Bitmain, the largest global producer of hardware for cryptocurrency mining, has decided to lay off workers due to disappointing sales.
The company, known for manufacturing application-specific integrated circuits (ASICs) optimized for cryptocurrency mining, is said to have implemented cost-cutting measures, including laying off some employees and eliminating bonuses and incentives. Workers have allegedly not been paid their dues since the previous month.
A purported internal communication from Bitmain indicates that the company has yet to achieve a net positive cash flow for September, particularly in ASIC orders. Consequently, the executive management has decided to withhold salaries for September, with a reassessment planned after the holiday on October 7.
Established in 2013, Bitmain is a major player in the production of ASICs, accounting for approximately 70% during peak production periods. The company’s Antminer ASIC line is renowned for its efficient computing hash rates for Bitcoin mining.
To retain customer loyalty, Bitmain introduced a reward plan in August 2022 for customers who made orders before the “Crypto winter,” a period marked by declining prices of common cryptocurrencies and diminished investor interest following the setbacks of FTX and TerraLuna.
The company advertised a loyalty program offering increased rewards for substantial orders from long-term customers. Bitmain had previously announced plans to go public with a projected valuation of $5 billion by late 2022 in 2021.
However, the prevailing bear market in the cryptocurrency industry has compelled the company to postpone its initial public offering (IPO) plans. The situation reflects the broader challenges faced by companies operating in the volatile and evolving cryptocurrency market.