Bitmain laid off staff, Zhan Ketuan sang against the tune: no need to lay off staff, firmly opposed
On the morning of January 6, Ketuan Zhan, the co-founder, former chairman, and major shareholder of Bitmain, issued an open letter ("A Letter to Employees: I Resolutely Oppose Layoffs") responded that Bitmain does not need to lay off staff, and he firmly opposes layoffs.
This is also the second open letter from Ketuan Zhan after he was uttered in the incident of power seizure on November 7, 2019. People in the circle joked that they are all "actor kings". Wu Jihan sang against it, but it seemed to be relatively weak, because at the shareholders meeting held by Ketuan Zhan before, there was no management team and investor members who gave him more support, and the investors even joked that he would bring shame on himself.
It is rumored that Bitmain's personnel optimization was launched on the morning of January 6, and the compensation plan is n+1 and options. On the same day, former chairman Zhan Ketuan issued a document opposing layoffs. Various headhunters have also received the news and began to communicate with the former employees of Bitmain.
Because a considerable number of early-maturing options were provided, some employees normally signed the resignation agreement. But there are also employees who are dissatisfied with the cash compensation of n+1.
Bitmain is currently the largest supplier of mining machines in the world. Mining machine revenue is directly related to the price of Bitcoin, accounting for more than 90% of the company's total revenue. As early as the first quarter of 2019, when Bitcoin plummeted to $3,100, Bitmain conducted a round of large-scale layoffs.
As for the layoffs again this time, according to insiders, the ratio of personnel optimization is about 1/3, and the main reasons are as follows:
First: Company executives are uncertain about the upcoming Bitcoin halving. It is only 4 months away from the halving, but the currency price is still hovering at 7000. Wu Jihan has warned on many occasions that the halving of Bitcoin does not necessarily bring about an increase in the price of the currency. Mining machine manufacturers as a whole should remain cautious until there is a clear upward signal.
Second: In 2019, competitors Shenma will carve up the mining machine market substantially, and Shenma has only about 80 employees for a long time. There are only more than 100 R&D personnel of Canaan Zhizhi that have been successfully listed, and half of them are AI R&D personnel. In the case of severe staff redundancy, Bitmain has not established an absolute advantage in products and markets after s9.
Third: The artificial intelligence industry as a whole burns money, and independent profits are nowhere in sight. AI business layoffs are not just Bitmain. The AI algorithm company Megvii and the AI chip company Horizon have both laid off employees, and the above two have huge financing support. The financing of Bitmain’s AI chip business was once vetoed by Zhan Ketuan. At present, relying solely on mining machine support is not feasible in the context of halving.
Even though the price of Bitcoin has basically stabilized at $7,000, due to the high cost of electricity, the enthusiasm of miners on the entire network is still not high. It is also because of this that the news that Bitmain will "lay off staff and streamline the winter, and the AI business will become the focus of layoffs" has recently been exposed by the media again, which has aroused great concern inside and outside the industry.
Ketuan Zhan stated in the open letter that Bitmain’s current cash flow is healthy, and it also has a huge amount of virtual currency assets. The existing S17 series mining machines are the most competitive products in the current market, and the upcoming S19 series mining machines will continue to bring considerable profits to Bitmain after the reduction of Bitcoin production. So "the layoff rumors are really absurd rhetoric."
Ketuan Zhan also stated in the article that Bitmain currently has 1,300 employees, of which less than half are in the AI business line. Compared with a team of thousands of people from friends and businessmen, the results are already very outstanding. As a high-tech company, Bitmain’s employees are the most important assets, and laying off employees in the AI department is an “almost suicidal wrong decision.”
However, some people in the industry pointed out that Ketuan Zhan’s move was just playing against the tune. He opposed all the decisions made by Jihan Wu and the original team, and he did not fully consider the team and employees as stated in the article. If he is in the corresponding position I believe that the same decision will be made in this environment.
It is believed that Bitmain’s previous equity and management disputes were also the trigger for this optimized layoff. The founders of the two major shareholders talked differently and publicly discorded on the Internet. I believe it will have a huge impact on all Bitmain employees. The market is not good, and the impact on business is inevitable.
Beishu Blockchain will continue to pay attention to Bitmain's layoffs, and hopes that both Bitmain's Ketuan Zhan and the existing management team can return to the correct path of corporate development and jointly contribute to the market, and hope that Bitmain's employees also have a proper Arrangement, this "big melon" doesn't matter if you don't eat it.
