Facing what is now an uncertain future, China-based Bitmain Technologies, once the largest manufacturer of crypto mining hardware is closing down yet another office. Per reports from Texas Public Radio, Bitmain is closing its cryptocurrency mining facility and data center in Rockdale, Texas.
The news is coming just a week after it was announced that the company would be appointing Wang Haichao, Director of Product Engineering as its new Chief Executive Officer. Wang will take over from Wu Jihan and Zhan Ketuan, who acted as co-CEOs since the company’s inception in 2013.
Bad News for Rockdale
Rockdale, TX used to be a thriving coal mining city. However, advancements in energy production affected the city, with many citizens moving away. Bitmain’s entrance into the city was largely welcomed, with the promise of new jobs and hope for the deserted city. Now, less than a year after locals were given optimism, it’s all coming crashing down again.
Concerning the closure, Milam County Judge Steve Young said, “I’m really disappointed because we had advertised this. We had waited for this. We had wanted this. We had welcomed this. This was huge. We currently need some positive news here. We need some jobs here. We need a tax base here, and this was a step in the right direction.”
Young made the statement in an address. He also confirmed that the layoff of every Bitmain employee in Texas, save for the Director of Human Relations and two core engineers. In addition to that, all Bitmain-related operations in the state had been suspended.
The company opened its $500 million Rockdale base in an abandoned Alcoa aluminum smelter in August 2018. At that time, Texas’ strong economy was a strong reason behind the decision to open a base here. Bitmain also reportedly got tax abatement privileges, and the state’s friendly crypto regulations were huge incentives.
With the tax abatement, Bitmain and other surrounding companies got as much as a 10-year tax break.
Bitmain Continues to Feel the Effects of the Crypto Winter
One of the reasons why Bitmain was forced to shut its Texas base has been the drop in crypto prices. The current bear market, which began in mid-2018, has affected a wide array of companies. Reports of layoffs and company closures have been rampant, and those in the crypto mining business have seen profits affected.
However, while many companies saw their operations affected by the crypto winter, Bitmain has had it worse than most.
No Escape in an IPO
With the drop in crypto prices, Bitmain needed to look into ways to help stay solvent. The company made an IPO application in September 2018. However, their hopes were all but put in jeopardy after Hong Kong-based regulators called the country’s crypto market “immature.” Amongst other things, regulators cited a notable lack of proper regulations over the space.
A Series of Layoffs
Things continued to deteriorate for Bitmain, as weeks became months. Last December, a report claimed that the tech giant was planning to lay off over half of its overall workforce in a “staff adjustment” aimed at “building a sustainable business.”
Bitmain Shuts Down Various International Bases
The bear market has also forced Bitmain to close some international offices as well.
News outlet Globes reported on December 10 that the manufacturer shut down its Israel-based blockchain development center. Bitmaintech Israel was founded in 2016 to further work on Connect BTC, a Bitmain-owned mining pool.
The facility was also to explore blockchain applications and develop Sophon, Bitmain’s artificial intelligence project.
The company is also reportedly closing down its Amsterdam location. Citing the same staff adjustments, a spokesperson said the decision is geared at remodeling Bitmain’s business framework. He also stated that while the project hasn’t been shut down yet, the decision has been made and the required processes have commenced.