By Xinghui Kok
SINGAPORE (Reuters) -Crypto exchange Huobi plans to lay off about 20% of its staff, Tron founder Justin Sun told Reuters.
Sun, a Chinese cryptocurrency entrepreneur who is also a member of Huobi’s global advisory board, said in a text message to Reuters that the “structural adjustment” has not started and is expected to be completed by the first quarter.
Huobi did not immediately respond to a Reuters request for comment.
In an internal memo to Huobi staff, Sun said Huobi has been like “a fire in the (crypto) winter” despite the deteriorating macro environment.
He said the platform has had an average of 20,000 new daily users the last three months.
Sun billed the restructuring as “short-term pains” that can eventually bring advantages to the exchange.
It was not immediately clear how many staff Huobi currently has.
The layoffs come against the broader backdrop of concerns about reserves and solvency at various cryptocurrency exchanges and lenders after the collapse of FTX and a series of other bankruptcies last year.
Cryptocurrency firm Genesis just cut 30% of its workforce in a second round of layoffs in less than six months, while crypto-focused bank Silvergate Capital Corp reported a sharp drop in its fourth-quarter crypto-related deposits.
“All these companies are resorting to cost cutting measures … Instead of plotting the ship through turbulent times, these executives have simply cut people losses,” said Joshua Chu, group chief risk officer at blockchain technology firms XBE, Coinllectibles and Marvion.
“Cutting people will not help these tech companies with solving the inherent problem in that they need to make products with underlying value.”
Last year, Huobi founder Leon Li sold his controlling stake in the company to buyout firm About Capital Management (HK) Co.
As per CoinMarketCap, the Huobi Token peaked at $9.40 in late October, with a 24-hour volume then of $52.50 million.
Its price on Friday was $4.50, and volume down to $18.50 million.
(Reporting by Xinghui Kok and additional reporting by Rae Wee; Editing by Kim Coghill)
