cryptoslate.com
Bitmain, a major player in the Bitcoin mining industry, has suspended employee salaries in response to financial struggle and poor progress on its mining operations.
According to reports from internal employees at the company, this suspension includes both performance and basic wages, and impacts all Bitmain staff. This drastic action echoes previous struggles for the company, which once held over 70% of the global Bitcoin mining machine market share.
Bitmain’s financial difficulties are not new. The company is said to have suffered considerably due to “infighting” between its two founders, Wu Jihan and Zhan Ketuan, over control, which severely impacted its hold on the market. Recent efforts to restore financial health included a salary reform in the first quarter of this year, where the original fixed salary was split into a basic salary and a performance salary linked to rank.
However, these measures have failed to turn around Bitmain’s fortunes. In a company notice issued in September 2023, Bitmain confirmed that its operating cash flow had turned negative and that the progress of its mining machines was not up to standard. This has led to the suspension of salaries, with the company stating that payments may resume after the holiday on October 7, depending on the situation. As of October 8, however, employees had not received their unpaid wages, and their 2022 year-end bonuses remain unpaid.
This news comes as Bitmain is attempting to get back on its feet through a significant business move. In August, Bitmain was considering an equity stake in Core Scientific, a major North American crypto mining company, as part of the latter’s bankruptcy restructuring plan. The proposed agreement, still subject to final documentation and court approval, involves Bitmain acquiring 27,000 S19j XP bitcoin miners from Core Scientific.
The plan could be a potential lifeline for Bitmain. However, the suspension of employee salaries underscores the uncertainty of the company’s future. It remains to be seen whether the Core Scientific deal, if finalized, could bring about the much-needed financial turnaround for Bitmain, or if the company’s financial woes will continue to worsen.