Crypto Core Scientific mining company has announced that it is reducing Its employees are down nearly ten percent and it is devaluing its assets as the cryptocurrency space continues to struggle at press time.
Core Scientific forced to lay off employees
This has been a popular topic in the crypto space lately. Several companies, including big-name exchanges like Gemini in New York and Coinbase, have had to make serious cuts and lay off many employees so they can continue to play. Gemini has laid off about ten percent of its employees, reducing its headcount from about 1,000 to 900, and Coinbase has gone even further by laying off about 18 percent of its staff. The company also suspended hiring.
This announcement came a few weeks ago, after the company released its financial results for the second quarter. The figures included $840 million in fees incurred to reduce the value of the company’s assets. Overall, the company experienced losses of more than $860 million for the second quarter.
Mike Levitt, CEO of Core Scientific, explained that cryptocurrency mining is a very difficult business in conditions like what traders and investors are seeing now. He said in a recent interview:
Lots of people who don’t have a home for their mining equipment have no capital… In the old days, we used to be sellers of servers, and there was a margin in that. We can look at the margin of that and combine that with our hosting agreements and look at the overall profitability. Now, we don’t really have a very lively selling project because most people are going straight to the manufacturers. Our hosting business needs to stand on its own two feet.
The crypto mining space has been severely damaged recently due to the ongoing price onslaught. For example, Bitcoin reached a new all-time high at around $68,000 per unit about ten months ago, even though the world’s number one digital currency by market capitalization is only struggling to maintain a position in the low $20,000 region. Overall, the crypto space has lost nearly $2 trillion in valuation.
Lots of miners suffer
This means crypto miners have been seeing their earnings drop insanely, and Core Scientific is just one of many companies at the time of writing that is really feeling the heat. Last July, as a way to keep up with mining costs, the company had to sell more bitcoins than it mined. It also reduced the hash rate significantly.
Chief Financial Officer Denise Sterling declared the staffing cuts were “surgical,” and were not likely to affect the company’s long-term operations.
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