Blockchain firm Bitfarms has announced it is to lay off staff in response to the ongoing coronavirus crisis, as the effects of economic downturn begin to bite the sector.
The publicly traded company, which is listed on Canada’s TSX Venture Exchange, said the reduction in staffing comes amid a raft of other measures designed to reduce costs and maintain “long-term viability.”
In an announcement, Bitfarms said the decision was temporary, and aimed at reducing monthly operating costs by up to a quarter. CFO John Rim said the measures were designed to help shield the company from the economic shock of the virus.
“Once fully implemented over the next several weeks, we expect the cost saving measures to reduce our monthly general and administrative expenses by approximately 20 to 25%,” Rim said.
He said the measures would help Bitfarms “withstand short-term volatility in mining economics and remain profitable through the long-term, including potential challenges relating to the upcoming Bitcoin halving.”
The announcement comes ahead of BTC halvening, where the reward for processing BTC is set to fall from 12.5 to 6.25 BTC, which was itself expected to have a significant impact on the digital currency transaction processor sector and the viability of some transaction processing firms.
Bitfarms has yet to confirm the number of people affected, or how many of its existing staff remain on the payroll.
Bitfarms operates across five facilities in Quebec, “powered by clean and competitively priced hydroelectricity.”
Interim CEO and Chief Strategy Officer Emiliano Grodzki said that due to the strong fundamentals of the company, it would continue to generate cash flow in spite of the unfolding developments around the virus.
“Our scale and quality of operations has allowed us to continue to generate positive cash flow in these difficult times.”
The economic fallout from coronavirus is expected to pile further pressure on the digital currency sector, as businesses of all sizes are forced to reassess their expenses and plans for the immediate future.
The news comes at a time of increasing layoffs across digital currency sectors, with Galaxy Digital and Bitcoin.com recently announcing layoffs of 10% and 15% of their staff respectively.
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