Adam Cochran posted an internal email showing that Binance was taking cost-cutting measures. Some claim that this is the reason behind the recent layoffs, contradicting publicly made statements by executives.
Cinneamhain Ventures’ Adam Cochran posted a Twitter thread on July 17, revealing an internal email from Binance. The email ostensibly shows the real reasons behind the layoffs that Binance carried out, which was claimed by CEO Changpeng Zhao to be about searching for the right talent.
Some Think Binance Cost-Cutting Behind Layoffs
Cochran’s post asks Zhao why he said that the layoffs were not about cost-cutting and not because of a “decline in profit,” as stated in the email.
There is also a section in the email that refers to the “current market environment and regulatory climate,” which has “unfortunately led to a decline in profit.”
As such, as explained in the email, extended benefits like mobile phone reimbursement and an 8-year child allowance would be cut. Binance goes on to say that it may continue to implement further measures to reduce expenses.
The email comes as Binance is being investigated by the Department of Justice (DOJ). It has also been charged by the United States Securities and Exchange Commission (SEC) and the Commodity and Futures Trading Commission (CFTC) for various reasons.
Read more: 7 Best Binance Alternatives in 2023
Zhao Called Layoff Discussions in Media FUD
Binance laid off 1000 employees last week as it celebrated its sixth anniversary. The customer support team was the most affected, and a spokesperson said that it was because of a desire to maintain the “right talent and expertise in critical roles.”
“We constantly say goodbye to people who are not strong fits with the company. Many are great people or high performers but may not fit our unique culture,” Zhao said. He also noted that the exchange was still hiring. He claimed that the media’s numbers were FUD and involuntary terminations occur in every company. Zhao has also claimed that the departure of some senior executives was FUD.
There have also been developments regarding the case between Binance and the SEC. An entity called Eeon, which is representing customers of Binance, is seeking compensation from Binance and the SEC. Eeon claims that the SEC and Binance’s attorneys have failed to sufficiently represent the interests of the customers.
The entity is seeking 20% of the daily value of withheld funds per customer, amounting to $1000 per day. The penalty would be split equally between Binance and the SEC, at $500 each. Binance saw $8 billion in outflows after the lawsuit was filed.
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