Ousted Bitmain co-founder, Micree Zhan, has come out to oppose Bitmain’s plan to layoff about 50% of its workforce. According to Zhan, the Bitcoin (BTC) mining giant’s plan to sack employees was a mistake, given that the company was in a healthy financial situation.
Earlier in January 2020, reports emerged that the Bitmain was planning another round of massive staff cutbacks in preparation for the Bitcoin halving slated to occur later in the year. The quadrennial halving event sees block reward for miners reducing by half and is a major aspect of Bitcoin’s proof of work (PoW) tokenomics.
Zhan Opposes Proposed Bitmain Staff Cuts
In an open letter posted on the Chinese messaging app, Weibo, on Monday (January 6, 2020), Zhan criticized the decision of the Bitmain management to layoff workers. The letter which was addressed to Bitmain employees stated reasons why the dismissal of half of the company’s employees was an unnecessary action.
An excerpt from the letter reads:
“To all employees of Bitmain: I am firmly opposed to layoffs! We don’t need to lay off people! We cannot play suicide!”
Earlier in January 2020, Blockonomi reported that the Beijing-based bitcoin mining giant had intentions to slash its workforce by half, terming it a “staff optimization plan”.
The plan to layoff staff members is part of efforts to navigate the upcoming bitcoin halving in May 2020 which Wu believes could negatively affect the company’s bottom line.
Wu, unlike many Bitcoin bulls, isn’t sold on the idea that the BTC price action will enjoy a positive boost following the halving. In October 2019, the Bitmain chief expressed doubts about bitcoin enjoying a bull run following the 2020 bitcoin halving.
Zhan is, however, of the opinion that halving blues or not, Bitmain is in a strong financial position to keep its workforce moving forward. Bitmain, however, suffered massive losses in 2018 following a failed bet on Bitcoin Cash (BCH) which saw the company scale back some of its expansion plans as well as drastically reduce its workforce.
Bitmain Can Compete in AI, Says Zhan
Zhan also dismissed the claim that Bitmain had to shed some of its overhead in the artificial intelligence (AI) department. Though no information was provided as to the affected departments in the upcoming staff cutbacks, reports say employees in the AI division will make up the bulk of the people losing their jobs.
As part of the letter, Zhan argues:
“The mining machine market is also very competitive, even more fierce than AI. Bitmain has achieved the world’s number one from zero! Our team is not afraid of competition! I believe that in the AI market, our team can also be the first in the world from zero!”
This is not the first time that the bitcoin mining behemoth is downsizing the number of employees. Back in December 2018, Bitmain fired half of its employees to reduce redundancy.
More Troubles for Bitcoin Mining Behemoth
Zhan is currently embroiled in a legal tussle with fellow co-founder Wu, for control of the company. The ousted co-founder reportedly filed with a court in the Cayman Islands to take back control of the firm.
The court filing is the latest salvo in the saga as both co-founders appear to have different visions for the company. Over the last couple of years, Bitmain has failed to establish any form of consistency in its leadership apparatus.
All of these issues have occurred at a time when Bitmain has lost its overwhelming dominance of the Bitcoin mining arena. The company has also been unable to complete its IPO plans even with Canaan, a major rival recently completing its U.S. IPO.