The largest cryptocurrency mining firm, Bitmain, is continuing its organizational shake-up with massive layoffs. Its ousted co-founder, Micree Zhan, has called the move a “near-suicidal” mistake.
In October of last year, Bitmain co-founder Micree Zhan was kicked from the company after a tumultuous power struggle. Formerly its executive director, he was dismissed of all responsibilities. He has since called his removal “illegal” but still remains the largest shareholder of Bitmain.
With plans to make a cut of 50 percent of its workforce, Bitmain is struggling to reinvent itself for 2020. Now, Zhan has penned a rebuttal to these plans and called them ridiculous. He went as far as arguing that they could be suicidal for the company.
Micree Zhan: Against Any Cuts and Layoffs
Zhan’s letter makes clear that he is unambiguously against any cuts. He has claimed that the math just doesn’t add up for these layoffs and, if implemented, would destroy Bitmain’s long-term viability as a company.
Zhan also argues that the cost of these employees relative to the firm’s profitability is not that high. Moreover, he suggests that the company expand to other areas like artificial intelligence (AI) and machine learning.
Rather than expand to other sectors, however, Bitmain has opted to double down on the hyper-competitive mining industry which is producing lower and lower returns. This, Zhan argues, could ultimately make Bitmain irrelevant.
Just in: Micree Zhan, the co-founder of #Bitmain, just posted a public letter through his wechat moment, saying that "He disagreed strongly with current layoffs in Bitmain."
He said most of layoffs are from R&D, it is rediculous, as the revenue of miners can afford the cost. pic.twitter.com/cR5n12nZgQ
— BlockBeats (@BlockBeatsChina) January 6, 2020
Can Bitmain Remain Profitable?
The entire controversy at Bitmain centers on a key issue: how well-positioned is the company for the future? By some estimates, it seems that the situation is looking bad.
Bitmain has failed to go public multiple times, which even led to a class-action lawsuit against the firm in March.
Although the company attempted another IPO filing with the SEC in late October, the status of that is also in limbo. It seems unlikely to be approved.
The mining giant was also hit hard by blunders in 2018 and for much of 2019, which saw it amassing heavy losses and significant debt. Its losses in Q2 2018 totaled some $1B, which it initially tried to withhold from investors.