Huobi responds to the news of layoffs: business adjustment, cost reduction and efficiency increase, preparation for “winter”

Under the dual pressure of the cryptocurrency bear market and regulation, Huobi, once known in the industry as one of the “three largest cryptocurrency exchanges in the world”, began to plan layoffs. According to people familiar with the matter, Huobi’s layoff ratio may exceed 30%.

At the same time, Huobi Technology, a Hong Kong-listed company under the Huobi Group, also released its interim financial report for 2022 as of March 31, 2022. The report shows that in the six months ended March 31, 2022, Huobi Technology achieved revenue of HK$351.8 million, an increase of 34.4% from HK$261.7 million in the same period last year; gross profit was HK$101 million, a decrease of 24.5% from HK$134 million in the same period last year. %. It is worth noting that during the reporting period, Huobi Technology lost HK$48.8 million, compared with a profit of HK$54.1 million in the same period last year.

Cold winter hits, Huobi starts layoffs plan

Recently, a person familiar with the matter said that Huobi will start the layoff process, and the sharp drop in revenue after the removal of Chinese users may be the main reason.

According to the data, the total number of Huobi employees may exceed 3,000, calculated at a ratio of 30%, that is to say, the layoffs may involve more than 1,000 people.

In addition, people familiar with the matter also revealed that there have been some problems with Huobi Asset Management and the newly invested public chain Cube recently, which may cause the current management team to face adjustments. However, some investors revealed that Huobi has abundant cash flow and more dividends, which should be an active adjustment under the downturn.

According to Jiemian News’ confirmation from multiple sources, the layoffs are true . A person close to Huobi said that the layoffs have just begun, but the exact scale is not yet clear.

In this regard, Huobi responded that there is no proportion and indicators of layoffs. On the one hand, after the Chinese mainland market was cleared, the investment in developing the international market was increased, which did have a certain impact on income; on the other hand, judging from the current market downturn, enterprises also need to make business adjustments and reduce costs. Increase efficiency and prepare for “winter”.

Seychelles-based Huobi Global is one of the prominent cryptocurrency exchanges, with daily trading volumes regularly exceeding $1.2 billion, according to CoinGecko. However, since the announcement of the removal of mainland Chinese users in the second half of 2021, its transaction volume has dropped significantly, and its revenue has also decreased. Du Jun, the co-founder of Huobi, said in an interview with CNBC in February that Huobi lost about 30% of its revenue due to its withdrawal from the mainland Chinese market.

The shrinking of the overall market value of cryptocurrencies has also cast a shadow over all companies. As of press time, the price of Bitcoin has once again fallen below the $20,000 mark, and the total market value of cryptocurrencies is around $940 billion. In less than a year, the total market capitalization of cryptocurrencies has fallen from a peak of $3 trillion to less than $1 trillion.

Huobi is not the first cryptocurrency exchange to lay off staff in recent times. Several companies have announced layoffs so far this month, including cryptocurrency trading platforms Coinbase, Crypto.com and Bybit, and cryptocurrency lending platforms Gemini and BlockFi.

“After more than 10 years of economic prosperity, we seem to be entering a recession. A recession could lead to another crypto winter that could last for a long time.” Coinbase co-founder and CEO Brian Armstrong said on June 14 This is what was said in the article announcing the layoffs.

Hong Kong-listed “Huobi Technology” has a mid-2022 revenue of HK$351.8 million and a loss of HK$48.8 million

Huobi Technology, a Hong Kong-listed company under the Huobi Group, also recently issued its interim financial report for 2022 as of March 31, 2022. The report shows that for the six months ended March 31, 2022, Huobi Technology achieved revenue of HK$351.8 million, an increase of 34.4% from HK$261.7 million in the same period last year; gross profit was HK$101 million, a decrease of 24.5% from HK$134 million in the same period last year. %.

It is worth noting that during the reporting period, Huobi Technology lost HK$48.8 million, compared with a profit of HK$54.1 million in the same period last year. In the financial report, Huobi Technology attributed it to the increase in the related expenses incurred by the company’s deployment of new businesses and applying for compliance licenses in major global markets during the reporting period compared with the same period last year.

The financial report shows that Huobi Technology’s revenue mainly comes from three aspects.

First, revenue from energy/electronic products-related businesses contributed HK$210.4 million, an increase of 30.9% from HK$160.7 million in the same period last year.

Second, the business related to providing technical solutions contributed HK$44.6 million. It is worth noting that the Saas business of software and services in this business declined sharply, from HK$61.5 million in the same period last year to HK$5.9 million. This business mainly allows customers to access and use technical software related to virtual asset trading platforms in a hosted environment. Regarding the decline in this part of the business, Huobi Technology explained in the financial report that the transaction volume of virtual assets decreased due to the decline in the price of virtual assets.

The third business is the virtual asset ecosystem, with a revenue of HK$96.8 million. The business of the virtual asset ecosystem mainly includes asset management, trust and custody business, virtual asset trading platform, virtual asset lending and over-the-counter transactions and virtual asset mining related businesses.

Among them, its subsidiary Huobi Asset Management (Hong Kong) Co., Ltd. (“Huobi Asset Management”) holds Class 4 (advising on securities) and Class 9 issued by the Hong Kong Securities and Futures Commission (“SFC”). (asset management) license, 4 fund products will be released from April 2021. Including a Bitcoin tracking fund, an Ethereum tracking fund, a multi-strategy virtual asset fund and an equity fund investing in blockchain mining-related businesses.

As of March 31, 2022, Huobi Technology’s asset management business revenue was HK$8.2 million, trust and custody business revenue was HK$12.5 million, and virtual asset lending and OTC transactions contributed approximately HK$76.1 million. The virtual asset trading platform and virtual asset mining did not generate income for the time being due to no business development during the reporting period.

The financial report also shows that during the period, the total assets of Huobi Technology reached 1.335 billion Hong Kong dollars, an increase of 87.4% year-on-year. Among them, cash and cash equivalents amounted to 374.6 million Hong Kong dollars, and the value of cryptocurrencies held was 398 million Hong Kong dollars. The cryptocurrencies disclosed in the financial report are mainly Bitcoin, Ethereum and stablecoins, but the specific number of holdings has not been announced yet.

For future development, Huobi Technology stated in its 2022 interim financial report that it will conduct in-depth research on Web3.0, DeFi, NFT, Metaverse and other fields.

The financial report also stated that the company has submitted an application for a digital asset activity license to the Monetary Authority of Singapore, with a view to realizing the operation of a local compliant exchange and expanding the company’s business scope.

Today, Hong Kong stock Huobi Technology weakened in early trading, and is now down 1.28% at HK$3.85. Since reaching the top of HK$29.5 in February last year, Huobi Technology has been on the decline, with a drop of more than 86%. The platform currency HT of Huobi Global is currently at US$4.93/piece. Since it announced its withdrawal in September last year, its price has dropped by more than 72% from the then high of US$17.67/piece.


(The above content is excerpted and reprinted by the partner Mars Finance, link to the original text | Source: Ruisi Finance )

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