Crypto exchange Huobi has confirmed it will cut its employee base by 20%. Justin Sun had earlier denied layoff reports.
Reports that Huobi is dramatically cutting headcount, requiring employees to take their salaries in stablecoins and closing internal staff communication channels to quell a rebellion have taken a toll on Huobi’s exchange token and trading volume.
In an interview with Hong Kong’s SCMP, Huobi adviser Justin Sun, who has been representing the company publicly, denied the Huobi layoffs. However, since then a company spokesperson confirmed the exchange's plans to reduce headcount by 20%.
"With the current state of the bear market, a very lean team will be maintained going forward," Kate Li, a spokesperson for the exchange, told CoinDesk in an emailed statement.
CoinGecko data shows that Huobi’s HT token has fallen by nearly 11% during the last 24 hours, to $4.67 as of morning East Asia time. The token is down nearly 30% over the past month.
During the last 24 hours, the measurement of normalized volume at the exchange is down 23% to $395 million from $510 million.
News of the layoffs and requirement to take salary in stablecoins was first reported by Colin Wu at WuBlockchain. WuBlockchain reported that those employees who refused to accept being paid in crypto would be dismissed, raising concerns throughout the workforce. Others on Twitter reported that staff had been locked out of internal communications channels.
Concern has also mounted about the quality of Huobi’s reserves in the aftermath of the FTX failure. A recent report from CryptoQuant shows that of all the exchanges, Huobi relies most on its own token to denominate its reserves. About 60% of its reserves are based on things other than its token. Of all exchanges, OKX and Deribit have the cleanest reserves, coming in at 100%, according to CryptoQuant.
UPDATE (Jan. 6, 09:15 UTC): Updates headline and first paragraph with layoff confirmation.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.