Crypto exchange Huobi to lay off 20% of staff as industry slump deepens

Crypto exchange Huobi to lay off 20% of staff as industry slump deepens

SINGAPORE, Jan 6 (Reuters) – Crypto exchange Huobi plans to lay off about 20% of its staff, the company told Reuters on Friday, in the latest sign of sharp cost cutting in the industry as investor interest in digital assets slumps.

“The planned layoff ratio is about 20%, but it is not implemented now. With the current state of the bear market, a very lean team will be maintained going forward,” Huobi said in a statement, responding to queries from Reuters.

The statement confirmed an earlier message from Tron founder Justin Sun, who said that the “structural adjustment” in Huobi had not started yet but was expected to be completed by the end of the first quarter.

Sun said the company has 1,100 employees now.

Sun, a Chinese cryptocurrency entrepreneur who is also a member of Huobi’s global advisory board, said in an internal memo to Huobi staff that the company has been like “a fire in the (crypto) winter” despite the deteriorating macro environment.

He added that the platform has had an average of 20,000 new daily users the last three months.

Huobi was ranked the eighth largest crypto exchange in terms of volume as of last November, according to analytics website CoinGecko.

Sun billed the restructuring as “short-term pains” that can eventually bring advantages to the exchange.

The layoffs come against the broader backdrop of concerns about reserves and solvency at various cryptocurrency exchanges and lenders after the collapse of FTX and a series of other bankruptcies last year.

Cryptocurrency firm Genesis just cut 30% of its workforce in a second round of layoffs in less than six months, while crypto-focused bank Silvergate Capital Corp (SI.N) reported a sharp drop in its fourth-quarter crypto-related deposits.

“All these companies are resorting to cost cutting measures … Instead of plotting the ship through turbulent times, these executives have simply cut people losses,” said Joshua Chu, group chief risk officer at blockchain technology firms XBE, Coinllectibles and Marvion.

“Cutting people will not help these tech companies with solving the inherent problem in that they need to make products with underlying value.”

Last year, Huobi founder Leon Li sold his controlling stake in the company to buyout firm About Capital Management (HK) Co.

As per CoinMarketCap, the Huobi Token peaked at $9.40 in late October, with a 24-hour volume then of $52.50 million. Its price on Friday was $4.68, and volume was down to $20.53 million.

Reporting by Xinghui Kok and Rae Wee; Editing by Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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