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Bitmain Halts Employee Salaries Amid Financial Woes, Report

source-logo  news.bitcoin.com 11 October 2023 03:00, UTC

Mining hardware manufacturer Bitmain has temporarily suspended salary payments to its employees, a media report has revealed. News of the move comes along with information suggesting that the crypto giant is experiencing financial difficulties with poor results from its operations.

Antminer Maker Bitmain Reportedly Delays Salaries and Bonuses

Bitmain, a major producer of bitcoin mining devices, has halted salaries and other incentives, according to inside sources quoted by Chinese media. In a notice reportedly confirmed by employees, Bitmain said its September cash flow has not turned positive.

The company was worried in particular about the orders for new mining machines, the report detailed, and decided to postpone some employee payments for September until later in October, depending on how the situation develops.

By Sunday, Bitmain workers were yet to receive their salaries for last month as well as their year-end bonuses for 2022. The suspension has affected all performance wages as well as half of the basic wages, according to the Leifeng tech news portal.

On Oct. 8, 2023, Odaily Planet Daily insiders reported that Bitmain fulfilled commitments by disbursing some of the pending September wages. The regional report notes the firm promises disbursement post the October 7 holiday based on prevailing circumstances.

In the first quarter of this year, Bitmain implemented a new salary structure. The original fixed salaries were split into two parts — a basic salary and a performance salary, with the latter also linked to employees’ ranks in the company.

Bitmain once held over 70% of the market for application-specific integrated circuit (ASIC) mining units but the business was affected by a conflict between its co-founders Jihan Wu and Micree Zhan that also included clashing over a reported “personnel optimization plan.”

The mining rig manufacturer has been trying to regain some of the lost ground. It recently launched a new addition to its Antminer line of products, the high-efficiency S21 series. In August, the company also announced a $54 million investment in hosting provider Core Scientific.

Pressed by the bear market and increasing regulatory challenges, a number of crypto firms have sought to cut expenses, including labor costs. Layoffs have been reported at major players in the industry such as the world’s largest crypto exchange, Binance, for example.

In April of this year, Bitmain was reportedly fined by Chinese authorities for allegedly failing to withhold and pay individual income tax on benefits provided to its employees such as travel subsidies. The news came amid reports of stepped up tax inspections in the sector.

What do you think about the reported delay in salary payments at Bitmain? Tell us in the comments section below.