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Huobi, crypto exchange, will cut staff by 20% as recession deepens in the industry

Huobi, crypto exchange, will cut staff by 20% as recession deepens in the industry

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Huobi, a cryptocurrency exchange, announced on Friday that it will shed around 20% of its workforce, the latest indication of the industry’s need to drastically cut costs as investor interest in digital assets wanes.

The announcement supported an earlier note from Justin Sun, Tron’s founder, in which he stated that while the “structural adjustment” at Huobi has not yet begun, it is expected to be completed by the end of the first quarter.

“A planned layoff rate of 20% is not being implemented at this time. Given the current bear market conditions, a very small team will continue to push forward.” In a statement, Huobi addressed Reuters inquiries.

The company currently employs 1,100 people, according to Sun.

For the past three months, the site has added an average of 20,000 new members each day, he continued.

In an internal message to Huobi employees, Sun, a Chinese cryptocurrency entrepreneur who is also a member of the company’s global advisory board, said the company has been “a fire in the (crypto) cold” despite the deteriorating macro climate.

According to analytics platform CoinGecko, Huobi was the eighth largest cryptocurrency exchange by volume at the end of November.

The restructuring, Sun said, will only cause “temporary uneasiness” and ultimately benefit the stock market.

Following the demise of FTX and a string of other bankruptcies over the past year, there are greater concerns about the reserves and solvency of other cryptocurrency exchanges and lenders. While cryptocurrency-focused bank Silvergate Capital Corp (SI.N) reported a sharp drop in its crypto-related deposits in the fourth quarter, cryptocurrency firm Genesis recently announced it would cut 30% of its staff in a second round of layoffs in less than six months.

“These companies use all techniques to reduce costs. These CEOs just let the employees go instead of strategizing how to navigate the ship through choppy waters. “XBE, Coinllectibles, and Marvion all use blockchain technology, according to Joshua Chu, group chief risk officer at each of those companies. “These digital companies need to produce goods with underlying value, so downsizing won’t help them meet that challenge.”

Leon Li, the founder of Huobi, sold his majority stake in the company to buyout firm About Capital Management (HK) Co. last year. According to CoinMarketCap, the Huobi token hit its all-time high in late October, peaking at $9.40 and a 24-hour volume of $52.50 million. Friday’s price was $4.68 and volume dropped to $20.53 million.

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