Foundry, a bitcoin mining pool managed by Digital Currency Group (DCG), has announced a reduction in its U.S. workforce by 16%, along with some minor cuts in India.
Operational Refinement Strategy
A company representative explained that this move is part of a broader strategy to refine operations and ensure long-term success amid market fluctuations. Foundry is shifting its focus to its core capabilities, particularly its claim of being the top Bitcoin mining pool in the world, while also working to expand its site operations. This restructuring coincides with the launch of several new subsidiaries under the DCG umbrella, including Yuma, as well as the separation of its own successful self-mining initiatives.
Job Cuts and Market Pressures
In prior communications to shareholders, the representative detailed the rationale behind this realignment and its effects on personnel. They expressed gratitude for the hard work of all employees, especially those impacted by the job cuts, acknowledging the difficulty of such decisions.
The cryptocurrency mining sector is currently experiencing significant pressure to reduce costs, particularly in light of the upcoming Bitcoin halving event, which will cut miners’ block rewards and consequently shrink profitability.
Market Insights
The bitcoin hash price index, a key metric for expected earnings based on hash rate, has dramatically fallen in the past year, dropping to around $60 per hash per day from an average of $100 in December. However, the index has shown slight improvement over the last quarter.
A recent JPMorgan report estimates that the total value of all unmined bitcoin is approximately $74 billion, based on current bitcoin market prices. In contrast, stocks related to mining have not performed as strongly. Despite these challenges, Bitcoin’s value has experienced a remarkable surge of over 130% in the past year, as highlighted by CoinDesk.
UPDATE: The spokesperson’s designation has been amended to indicate a Foundry representative rather than one from DCG.
Source: Coindesk
