Crypto mining company Core Scientific has announced it is reducing its staff by roughly ten percent and that it’s devaluing the value of its assets as the crypto space continues to suffer at press time.
Core Scientific Forced to Lay Off Staff
This has been a common theme in the crypto space as of late. Many companies, including big-name exchanges like Gemini in New York and Coinbase have been forced to make serious cutbacks and lay off several staff members so they can remain in play. Gemini has laid off about ten percent of its staff, reducing its number of workers from about 1,000 individuals to 900, and Coinbase has gone even further by laying off about 18 percent of its staff. The company has also put a hiring freeze in place.
The announcement came a few weeks ago after the company released its second-quarter financial results. The figures included an $840 million charge that was incurred to reduce the value of the firm’s assets. Overall, the company experienced losses for quarter two exceeding $860 million.
CEO of Core Scientific Mike Levitt explained that crypto mining is an extremely tricky business in conditions like what traders and investors are seeing now. He stated in a recent interview:
A lot of folks that don’t have a home for their mining equipment also don’t have capital… In the good old days, we used to be a reseller of servers, and there was margin in that. We could look at the margin of that and combine that with our hosting agreements and look at the overall profitability. Now, we really don’t have a very vibrant reseller business because most folks are going directly to the manufacturers. Our hosting business needs to stand on its own two feet.
The crypto mining space has been damaged heavily as of late due to the ongoing onslaught of prices. Bitcoin, for example, had reached a new all-time high of roughly $68,000 per unit about ten months ago, though now the world’s number one digital currency by market cap is struggling just to maintain a position in the low $20K region. Overall, the crypto space has lost close to $2 trillion in valuation.
So Many Miners Are Suffering
This means that crypto miners have been seeing their profits plunge like mad, and Core Scientific is just one of many firms at the time of writing that are really feeling the heat. Last July, as a means of keeping up with mining costs, the firm was forced to sell more bitcoin than it extracted. It also lowered its hash rate significantly.
Chief financial officer of the company Denise Sterling announced that the staff cuts were “surgical,” and weren’t likely to affect the company’s operations in the long run.