Hut 8, a Canadian Bitcoin mining firm has laid off more employees, citing poor revenue figures due to the prolonged cryptocurrency bear market of 2018. The Canadian Broadcasting Corporation (CBC) reports that it is the second round of staff cuts, following layoffs earlier in January 2019, as the company reportedly attempts to streamline its operations in 2019.
Bitfury Partner Company Forced to Cut Staff Strength
A former employee of the firm who spoke to CBC News said the company laid off about 25 percent of its staff strength around the world. The ex-employee was among those affected by the earlier staff cuts that took place in January 2019 which reportedly affected about 24 people.
Commenting on the situation, the anonymous source, said:
“Power prices were going up, and bitcoin was going down. In Drumheller, we were expecting some form of layoff but not in the mass amount that we had. At the time, we were just starting to be up online, be completely streamlined.”
According to the unnamed ex-employee, the number of affected staff members turned out to be a surprise as they only expected a couple of people to be laid off. However, the company relieved half of the data center operations crew of their jobs.
In partnership with blockchain firm, Bitfury, Hut 8 operates 85 data centers in Drumheller and Medicine Hat. Reports indicate that the company has mined more than 7,000 bitcoin (BTC) since it began operations in December 2017 – right around the time when the cryptocurrency market experienced a massive bull run with the BTC price almost topping $20,000.
Streamlining or Bear Market Losses?
Since the culmination of the 2017 bull run in mid-December 2017, cryptocurrency prices have taken a massive hit, plummeting by more than 80 percent across the board. For half of the year, mining firms seemed unmoved by the bear market, but in the latter half of 2018, many began to downsize or reorganize their operations.
In an email quoted by CBC News, Bitfury explained the situation surrounding the staff cuts, saying:
“As part of those efforts, we are streamlining our operations in order to help us advance strategic plans to develop innovative software and hardware solutions and focus on other emerging technologies. This week’s actions reflect those efforts. This decision will enable us to lead the company into our next chapter of growth. We sincerely appreciate everything our team members have helped us accomplish.”
Bitfury and Hut 8 aren’t the only cryptocurrency mining firms to offer up “streamlining operations” as an official explanation for staff cuts. Cryptocurrency mining behemoth, Bitmain also used similar language in a recent statement released by the company.
After the last price crash in mid-November 2018 that saw BTC fall from $6,000 to $3,100, many miners were forced to down tools. Mining hardware manufacturers like Nvidia have also reported losses due to the bear market of 2018.