A new report by the Wall Street Journal has revealed that Binance has reduced employee benefits, amidst a turn in fortunes for the crypto firm. This comes as Changpeng Zhao, CEO of Binance which is world’s largest exchange, continues to insist that the company remains profitable and unaffected by an ongoing Securities and Exchange Commission lawsuit,
Recall that last week, Binance laid off over 1,000 employees worldwide. This was more than a third of its workforce -around 8,000. Three senior executives have also reportedly resigned due to concerns about Zhao’s handling of an ongoing United States Department of Justice investigation and other global regulatory scrutiny.
The new Wall Street Journal report
Binance has reportedly cut back on certain benefits to its employees in June amid reevaluation efforts at the firm, according to former employees and internal company messages viewed by the Wall Street Journal.
The crypto exchange reportedly stopped offering reimbursement to employees for certain expenses, including the use of mobile phones, fitness and working from home. An internal message stated:
“Considering the current market environment and regulatory climate that has unfortunately led to a decline in profit, we have to be more prudent with our spending.”
According to the report, the exchange cited the “current market environment and regulatory climate,” which led to a decline in profit. It also suggested that more cost-cutting measures may be implemented. Last week, when the world’s largest exchange was celebrating its sixth anniversary, a report said Binance had let go of more than 1,000 people in a matter of weeks.
In a conversation with CoinTelegraph, a spokesperson said the firm would consider scaling back on “certain products, business units, staff benefits and policies” in response to business and regulatory concerns.
Changpeng Zhao insists all is well at Binance
Binance’s CEO, CZ, told workers in a company meeting on Friday that Binance was still profitable and had not been impacted by the recent lawsuits it’s currently facing.
He however said that there could be additional layoffs every three to six months and that he did not know if and when the worker benefits that had been cut would be coming back, according to the meeting attendees that spoke to the Wall Street Journal.
Read also: FTX funds claim portal goes live
Also, in an email to Coindesk, the company spokesperson said:
“As we prepare for the next major bull cycle, it has become clear that we need to focus on talent density across the organization to ensure we remain nimble and dynamic. This is not a case of rightsizing, but rather, reevaluating whether we have the right talent and expertise in critical roles. This will include looking at certain products, business units, staff benefits and policies to ensure our resources are allocated properly to reflect the evolving demands of users and regulators.”
What is next
Recently, there have been a semblance of instability at Binance but the developments in the past one week has shown that all is not well behind the scenes.
There has been an unending war between Binance and the United States Securities and Exchange Commission and Commodity Futures Trading Commission. Also, there has been a recent exodus of top executives, lay-off of over 1,000 staffs and now, cutting of employees benefits.
All these are a pointers to stormy times being experienced by Binance. As an industry leader which largely dictates market trends and direction, crypto enthusiasts can only hope that Binance puts these issues behind and get back on the right track as soon as possible.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!