The company said that it will lay off approximately 20% of its employees at the crypto exchange Huobi. This is the latest indication of drastic cost-cutting in the sector as investor interest in digital assets plummets.
“The planned layoff rate is approximately 20%, but it’s not being implemented right now. Huobi responded to Reuters queries by releasing a statement. Huobi stated that a lean team would be maintained in the face of the bear market.
This statement confirmed a message by Tron founder Justin Sun that “structural adjustment” in Huobi was not yet underway, but would be finished by the end of the first quarter.
Sun stated that the company now has 1,100 employees.
Crypto exchange @HuobiGlobal is planning to lay off 20% of its workforce, as a months-long rout in digital asset prices continues to disrupt many of the industry's largest companies. #Genesis said on Thursday that it had made more job cuts, amounting to roughly 30% #CryptoWinter https://t.co/yIlvcq9r0u
— Share_Talk ™ (@Share_Talk) January 6, 2023
Sun, a Chinese cryptocurrency entrepreneur and member of Huobi’s global advisory board, stated in an internal memo that the company had been “a fire in winter ” despite the worsening macro environment.
He said that the platform had an average of 20,000 users per day over the past three months.
According to CoinGecko, Huobi was ranked eighth in terms of volume for cryptocurrency exchanges as of November 2017.
Sun described the restructuring as “short-term pains” that could eventually lead to benefits for the exchange.
These layoffs are taking place against a backdrop of greater concerns about the solvency and reserves of various cryptocurrency exchanges, lenders and lenders following the collapse of FTX as well as a number of other bankruptcies in the last year.
The cryptocurrency company Genesis has just laid off 30% of its workforce, while the crypto-focused bank Silvergate Capital Corp saw a sharp drop in crypto-related deposits in its fourth quarter.
“All these companies resort to cost-cutting measures… These executives are cutting people’s losses, instead of planning the ship through turbulent times,” Joshua Chu, group chief risks officer at blockchain technology companies XBE, Coinllectibles, and Marvion said.
“Cutting people won’t help these tech companies solve the inherent problem in which they need products with underlying values.”
Last year, Leon Li, founder of Huobi, sold his controlling stake to purchase About Capital Management (HK) Co.
According to CoinMarketCap, Huobi Token reached its peak at $9.40 in October with a volume of $52.50 million during the 24-hour period. On Friday, it was at $4.68 and the volume was at $20.53 million.
