March 27, 2024
Bitmain Halts Employee Salaries
Bitcoin News

Bitcoin ASIC Giant Bitmain Halts Employee Salaries, Cites Financial Woes

Bitmain, a manufacturer specializing in Bitcoin application-specific integrated circuits (ASICs), has reportedly halted salary payments for its employees starting in September and going forward. This development comes as the company grapples with financial difficulties, as disclosed by several Bitmain employees who are familiar with the situation. Alongside discontinuing bonuses and incentives for its workforce, Bitmain has also fallen behind in compensating its employees for their work since the previous month.

Furthermore, employees are now facing a significant 50% reduction in their base salaries. Bitmain communicated by stating that 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 and reviewed after October 7, after the holiday.

Bitmain, established in Beijing, China, in 2013, previously held a dominant position as one of the world’s leading manufacturers of Bitcoin mining ASICs, boasting an estimated 70% market share during its peak. The company’s Antminer ASIC series was renowned for its superior hash rate computations in Bitcoin mining. In August, Hive, a Bitcoin miner, announced its acquisition of 2,000 Bitmain S19 XP ASIC miners for immediate deployment in its mining operations. These S19XP ASIC miners are listed at a price of $4,653 on Bitmain’s platform. Hive anticipates that its mining rigs, following integration, will generate a combined revenue of $80 per megawatt hour, encompassing both Bitmain and non-Bitmain models.

In 2021, Jihan Wu, one of Bitmain’s co-founders, reached a settlement in a year-long ownership dispute with his co-founder, Micree Zhan. As per the terms of the agreement, Wu would step down from his roles as chairman and CEO of Bitmain and sell his ownership stake to Zhan for $600 million. At the time, Bitmain had plans for an initial public offering with a projected valuation of $5 billion by late 2022. However, these plans are believed to have been put on hold due to the prolonged bear market conditions.

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