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Former Anheuser-Busch executive warns ‘thousands of more’ employees will be laid off amid sales slump – Yahoo Finance
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Here are the companies that have laid off employees this year
New York
CNN
—
Just this week, Alphabet, Google’s parent company, Microsoft
(MSFT) and Vox Media announced layoffs that will affect more than 22,000 workers.
Their moves follow on the heels of job cuts earlier this month at Amazon, Goldman Sachs and Salesforce. More companies are expected to do the same as firms that aggressively hired over the last two years slam on the brakes, and in many cases shift into reverse.
The cutbacks are in sharp contrast to 2022, which had the second-highest level of job gains on record, with 4.5 million. But last year’s job numbers began falling as the year went on, with December’s job report showing the lowest monthly gains in two years.
The highest level of hiring occurred in 2021, when 6.7 million jobs were added. But that came on the heels of the first year of the pandemic, when the US effectively shut down and 9.3 million jobs were lost.
The current layoffs are across multiple industries, from media firms to Wall Street, but so far are hitting Big Tech especially hard.
That’s a contrast from job losses during the pandemic, which saw consumers’ buying habits shifting toward e-commerce and other online services during lockdown. Tech firms went on a hiring spree.
But now, workers are returning to their offices and in-person shopping is bouncing back. Add in the increasing likelihood of a recession, higher interest rates and tepid demand due to rising prices, and tech businesses are slashing their costs.
January has been filled with headlines announcing job cuts at company after company. Here is a list of layoffs this month – so far.
(GOOGL)’s parent said Friday it is laying off 12,000 workers across product areas and regions, or 6% of its workforce. Alphabet added 50,000 workers over the past two years as the pandemic created greater demand for its services. But recent recession fears has advertisers pulling back from its core digital ad business.
“Over the past two years we’ve seen periods of dramatic growth,” CEO Sundar Pichai said in an email to employees. “To match and fuel that growth, we hired for a different economic reality than the one we face today.”
The tech behemoth is laying off 10,000 employees, the company said in a securities filing on Wednesday. Globally, Microsoft has 221,000 full-time employees with 122,000 of them based in the US.
CEO Satya Nadella said during a talk at Davos that “no one can defy gravity” and that Microsoft could not ignore the weaker global economy.
“We’re living through times of significant change, and as I meet with customers and partners, a few things are clear,” Nadella wrote in a memo. “First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.”
The publisher of the news and opinion website Vox, tech website The Verge and New York Magazine, announced Friday that it’s cutting 7% of its staff, or about 130 people.
“We are experiencing and expect more of the same economic and financial pressures that others in the media and tech industries have encountered,” chief executive Jim Bankoff said in a memo.
Layoffs are also hitting Wall Street hard. The world’s largest asset manager is eliminating 500 jobs, or less than 3% of its workforce.
Today’s “unprecedented market environment” is a stark contrast from its attitude over the last three years,, when it increased its staff by about 22%. Its last major round of cutbacks was in 2019.
The bank will lay off up to 3,200 workers this month amid a slump in global dealmaking activity. More than a third of the cuts are expected to be from the firm’s trading and banking units. Goldman Sachs
(FADXX) had almost 50,000 employees at the end of last year’s third quarter.
The crypto brokerage announced in early January that it’s cutting 950 people – almost one in five employees in its workforce. The move comes just a few months after Coinbase laid off 1,100 people.
Though Bitcoin had a solid start to the new year, crypto companies were slammed by significant drops in prices of Bitcoin and other cryptocurrencies.
McDonald’s
(MCD), which thrived during the pandemic, is planning on cutting some of its corporate staff, CEO Chris Kempczinski said this month.
“We will evaluate roles and staffing levels in parts of the organization and there will be difficult discussions and decisions ahead,” Kempszinski said, outlining a plan to “break down internal barriers, grow more innovative and reduce work that doesn’t align with the company’s priorities.”
The online personalized subscription clothing retailer said it plans to lay off 20% of its salaried staff.
“We will be losing many talented team members from across the company and I am truly sorry,” Stitch Fix
(SFIX) founder and former CEO Katrina Lake wrote in a blog post.
As the new year began, Amazon
(AMZN) said it plans to lay off more than 18,000 employees. Departments from human resources to the company’s Amazon
(AMZN) Stores will be affected.
“Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” CEO Andy Jassy said in a memo to employees.
Amazon boomed during the pandemic, and hired rapidly over the last few years. But demand has cooled as consumers return to their offline lives and battle high prices. Amazon says it has more than 800,000 employees.
At The New York Times DealBook summit In November, Jassy said he believes Amazon “made the right decision” regarding its rapid infrastructure build out but said its hiring spree is a “lesson for everyone.”
Even as he spoke, Amazon warehouse workers who helped organize the company’s first-ever US labor union at a Staten Island facility last year were picketing Jassy’s appearance outside the conference venue.
“We definitely want to take this opportunity to let him know that the workers are waiting and we are ready to negotiate our first contract,” Amazon Labor Union President Chris Smalls said, calling the protest a “welcoming party” for Jassy.
Salesforce
(CRM) will cut about 10% of its workforce from its more than 70,000 employess and reduce its real estate footprint. In a letter to employees, Salesforce
(CRM)’s chair and co-CEO Marc Benioff admitted to adding too much to the company’s headcount early in the pandemic.
– CNN’s Clare Duffy, Matt Egan, Oliver Darcy, Julia Horowitz, Catherine Thorbecke, Paul R. La Monica, Nathaniel Meyersohn, Parija Kavilanz, Danielle Wiener-Bronner and Hanna Ziady contributed to this report.
Laid Off Tech Workers Quickly Find New Jobs
Most laid off tech workers are finding jobs shortly after beginning their search, a new survey shows, as employers continue to scoop up workers in a tight labor market.
About 79% of workers recently hired after a tech-company layoff or termination landed their new job within three months of starting their search, according to a
ZipRecruiter
survey of new hires. That was just below the 83% share of all laid-off workers who were re-employed in the same time frame.
Nearly four in 10 previously laid off tech workers found jobs less than a month after they began searching, ZipRecruiter found in the survey.
“Despite the widespread layoffs, hiring freezes, and cost-cutting taking place in tech, many tech workers are finding reemployment remarkably quickly,” said
Julia Pollak,
chief economist at ZipRecruiter. “They’re still the most sought-after workers with the most in-demand skills.”
Job openings across the economy—at 10.3 million—are down from record highs but far exceed the number of unemployed Americans, providing opportunities for workers who lose their jobs and those who choose to seek another.
Workers previously employed in other industries, including entertainment and leisure, transportation and delivery, and manufacturing, also found new jobs quickly, the ZipRecruiter data showed.
The job market for tech workers is slowing as the broader economy falters under the pressure of Federal Reserve interest rate increases and high inflation. Layoffs and hiring freezes are occurring at startups and large tech companies such as Amazon.com Inc. and
parent Meta Platforms Inc. that hired aggressively early on in the pandemic. The cuts are hitting workers in tech jobs—such as software engineers—and other corporate roles including recruiters.
Still, tech firms making cuts are outnumbered by those that are hiring.
A smaller share of tech workers is spending long periods searching for work after a layoff. About 5% of laid off tech workers who found jobs from April to October had spent more than six months hunting for work, down from 26% of those hired between August 2021 and February 2022, ZipRecruiter said.
Wen Huber, age 23, was laid off from a videographer job at a real estate tech startup in late July. Mr. Huber, who lives near Seattle, thought it would take awhile to land a new position, given he didn’t have a four-year-college degree and many other job seekers were flooding the tech job market.
“When I was applying, to be honest, I didn’t feel very confident because there was such an influx of competition with a lot of people also being laid off,” he said.
Mr. Huber had built up a savings buffer, allowing him to be more selective in his job hunt as he sought to pivot into social media. He documented his unemployment experience in a series of videos on LinkedIn. The videos helped him land an interview—and ultimately an offer—for a social media manager job at a software startup, Mr. Huber said. He started in September.
“I was surprised at how quickly I was able to secure an offer for a job,” he said.
Wen Huber landed a job offer for a social media manager position within one-and-a-half months of his layoff.
Photo:
Devon Potts
Short job searches in tech have become slightly less common as the labor market slows from earlier in the year. Among people who recently lost a job and worked in tech previously, 37% found a new position within one month of starting to look, according to ZipRecruiter. That compared with 50% in February’s survey.
“We’ve definitely seen a slowdown in hiring, but the reason why is that the job creation level was beyond record highs because of the slingshot effect of the pandemic,” said Ryan Sutton, district president at Robert Half, a global recruitment firm. “From August 2020 to May 2022, it wasn’t red-hot. It was lava-hot.”
Usually when mass layoffs hit, there is an influx of tech candidates contacting his company to help with their job search, Mr. Sutton said.
“We have not seen it yet—we haven’t seen more candidates coming to market,” he said. “Our recruiters are having to hunt and hustle just as much as they had to in the last couple of years.”
Client firms in tech also haven’t mentioned any plans to cut jobs, Mr. Sutton said.
About 74% of workers recently hired after losing or leaving a job at a tech company remained in the industry, according to ZipRecruiter. Others who previously worked at tech companies switched to firms in industries such as retail, financial services and healthcare in the six months ending in mid-October.
Pinnacol Assurance, a 650-person workers’ compensation insurer, saw a 46% increase in job candidates from big tech companies including Meta, Microsoft and Twitter between September and mid-December, said Tim Johnson, the company’s chief human resources officer.
The influx of applicants has helped Pinnacol fill tech-related roles such as data scientist, machine-learning engineer and cloud architect in recent months. In mid-December, Pinnacol’s recruiting team made an offer to a job candidate from Google, Mr. Johnson said.
Ayanna Chapman, 42, started a systems-engineering job job at Pinnacol overseeing its computer systems in mid-November after she was laid off from another systems-engineer position this spring.
“‘Our recruiters are having to hunt and hustle just as much as they had to in the last couple of years.’”
A generous severance package allowed her to take several months to freshen skills and study for certifications including in the Python programming language. When the Atlanta–area resident began looking for work in the second week of October, recruiters quickly reached out with interview opportunities, she said.
Ms. Chapman was keen on finding a job with stability and thought Pinnacol would fit. She received an offer from the Denver–based company about two weeks after beginning the interview process, much faster than previous experiences, she said.
“I literally cried tears of joy like, ‘Oh, my God, I got the job. I can’t believe it,’” Ms. Chapman said.
Employers broadly are responding to job candidates fast, likely for fear of losing them in a competitive market with a historically low jobless rate of 3.7%. Nine in 10 ZipRecruiter survey respondents said they heard back from a recruiter or hiring manager within a week of applying for a job.
ZipRecruiter’s most recent survey was drawn from 2,550 U.S. residents who had started a new job within the six months ending in mid-October. The data align with other job-market figures that signal the hot labor market is cooling.
Of the ZipRecruiter survey respondents who said they previously worked in tech, most of them likely worked for tech companies regardless of their occupation, Ms. Pollak said. In other words, a recruiter at Amazon would likely be classified as a tech-industry worker in the survey. But a data scientist at
Home Depot
would be a retail-industry worker.
Separate labor-market figures suggest employers across industries are still seeking to hire tech workers, though less so than earlier in the pandemic. Postings on job-site Indeed for tech occupations are still well above prepandemic levels, but have fallen steeply over the past year.
Software developer job ads on Indeed are down 34% from a year earlier, and ads for mathematics roles—which include data scientists—are 28% lower. Overall postings are down 7.7% from a year ago.
“With tech workers, it’s a much bigger pullback,” said
Nick Bunker,
an economist at Indeed Hiring Lab. “It’s still above prepandemic levels, but if the current trend keeps up, I don’t imagine that talking point will be true anymore at some point next year.”
The uncertain economic outlook is likely weighing on employers’ appetite for white-collar workers, since they tend to base hiring plans for higher-paid workers on the longer-term business outlook, said Mr. Bunker. By contrast, firms usually gear hiring for waiters, deliverers and other lower-paid jobs according to immediate business needs, he said.
Many companies with among the highest shares of new tech job postings on Indeed in late November were in industries such as consulting, financial services and aerospace.
“For tech jobs, it is still a relatively healthy economic climate and relatively healthy labor market,” said Scott Dobroski, Indeed career expert. “A lot of bright spots for tech workers currently lie outside of traditional tech companies.”
U.S. aerospace companies cut more than 100,000 workers during the pandemic, but have been hiring back at a fast clip and struggling for a year with staffing shortages that have crimped supply chains.
Raytheon Technologies Corp.
CEO
Greg Hayes
said during the summer he was optimistic that layoffs among tech companies would start to ease his own hiring challenges. There are signs that is happening.
“We are starting to see an uptick in interest from the tech layoffs,” said
Mike Dippold,
chief financial officer of
Leonardo DRS Inc.,
which is based Arlington, Va.
Mr. Dippold said the defense-sensor specialist, like many peers, still had more open positions than it would like, but the staffing situation was starting to improve.
—Doug Cameron contributed to this article.
Write to Sarah Chaney Cambon at sarah.chaney@wsj.com and Gwynn Guilford at gwynn.guilford@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Twitter has reportedly laid off part of its infrastructure team
Stop me if you’ve heard this one before, but Elon Musk has reportedly laid off more of Twitter’s workforce. According to , the company cut part of its infrastructure division on Friday evening. The scale of the layoffs is unclear, but some engineers took to Twitter yesterday to say they were told over email their contribution was no longer required. The latest cuts come after reported on Tuesday that Musk had laid off Nelson Abramson, Twitter’s head of infrastructure, among a handful of other high-ranking employees at the company.
And that was my last day at Twitter. Laid off by email. The experience has been indescribable from chaos to hilarious.
— Dave Beckett (@dajobe) December 17, 2022
Twitter did not immediately respond to Engadget’s comment request. The company has not had a communications team since it began reducing its workforce. By The Information’s estimate, Twitter’s headcount has shrunk by about 75 percent since Musk’s . The social media website employed approximately 7,500 under . As of a week ago, Twitter’s internal Slack listed around 2,000 employees, according to the outlet. In November, Musk what was left of the company’s workforce Twitter would not lay off any more workers. The pledge came after the billionaire’s led to at least 1,200 resignations.
Additional casualties among the team responsible for keeping Twitter up and running are likely to add to about how unreliable the site may become in the near future. At the same time, the move may who were already considered how much time Musk was spending on Twitter. According to The Information, Musk tapped Tesla engineer Sheen Austin to run the social media website’s infrastructure team following Abramson’s departure.
The layoffs also point to the seemingly precarious financial position Twitter has found itself in since Musk’s takeover. In recent weeks, Elon and other executives reportedly discussed the potential consequences of denying severance payments to the thousands of people who were let go from the company in recent weeks. The company is also behind on rent for its San Fransisco headquarters and network of global satellite offices.
All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission. All prices are correct at the time of publishing.
Streaker who was LAID OUT by LA Rams player during game is animal rights activist
Linebacker Bobby Wagner made a massive hit on an animal rights activist who invaded the field during the LA Rams’ loss against the San Francisco 49ers.
Earlier in the game, the Rams defense hadn’t been able to come close to getting a hit on Deebo Samuel but Wagner was on hand to tackle the invader to the ground.
The invader has been identified as animal rights activist Alex Taylor of the group Direct Action Everywhere.
The protest was designed to draw attention to the trial of two members of the group in Utah, where they are accused of stealing pigs.
The game was temporarily stopped as Taylor, carrying a purple flare, ran on the field with security chasing behind him.
The security staff struggled to keep up with Taylor leaving Wagner and teammate Takkarist McKinley decided to take matters into their own hands.
The pair had been stood on the sideline as they watched the spectator’s great escape unfold. As he passed them, the Rams players darted out in an attempt to bring him down.
McKinley came at Taylor from behind just as security had eventually caught up. He and the staff both made a move to catch the spectator but Wagner beat them to it.
Rams linebacker Bobby Wagner (right) made a massive hit on a fan who had invaded the field
Teammate Takkarist McKinley (left) also tried to bring the spectator down during the game
On Instagram, the group posted a photo of Allison Fluty and Alex Taylor showing their citations for entering the field of play
Direct Action Everywhere is a grassroots protest organization that advertised the stunt on their Instagram page prior to it taking place.
Taylor was not alone, his partner in crime, Allison Fluty, was tackled by security before she could get to the field.
In a tweet from the DAE’s official account, the pair are ‘a bit beaten up but in good spirits.’ On Instagram, the group posted a photo of Fluty and Taylor showing their citations for entering the field of play.
The post concluded: ‘They appreciate everyone’s outpouring of support and encourage folks to support the #righttorescue at righttorescue.com.’
The goal of the protest was to highlight the Smithfield Trial in which two members of the group, Paul Darwin Picklesimer and Wayne Hsiung, are accused of smuggling two piglets from the Circle Flour Farms in Utah in 2017.
Three other activists were charged in the case but took plea deals from prosecutors. The farm in question is owned by Smithfield Foods.
The trial began on Monday. Both Taylor and Fluty are from the Bay Area. The pair’s t-shirts read ‘RighttoRescue.’
Taylor said prior to the protest: ‘Smithfield will do anything to shield its abuses and protect its profits. We must take action to stop the violence and create a better future for us all.’
A month ago, two DAE activists disrupted the LA Rams opening game of the season against the Buffalo Bills. While earlier this year, the group interrupted a Minnesota Timberwolves game.
The spectator had evaded security staff (left) and invaded the field with a red flare
The veteran produced a massive hit on the invader, bringing him to the ground. Wagner then calmly stood up and strolled away from the scene.
Wagner spoke about the tackle after the game saying: ‘That’s not making a play. That’s just keeping it safe. You don’t know what that fan got or what they’re doing.
He went on: ‘You see it all the time, and we don’t know what they’re carrying in their pockets. It’s whatever that little smoke stuff is, but that s*** could be dangerous.’
The Super Bowl winner also said: ‘One of the guys on the other side, it looked like he got hurt, and security looked like he was struggling, so I was frustrated, so I took it out on him.’
While 49ers coach Kyle Shanahan said of the incident: ‘I saw Bobby Wagner take somebody out. That was kind of cool to see.’
The clip was not shown on the main ESPN coverage but it did make an appearance on Manningcast and both Peyton and Eli Manning enjoyed the action.
Peyton said: ‘That’s what we’re talking about. Wagner, a veteran. Right, get him down, now get out and let these guys take over.’
The incident came with 0:41 left on the clock in the second quarter as the Rams found themselves 6-14 down to the 49ers.
Jennifer Coolidge Credits Playing the MILF in ‘American Pie’ With Getting Her Laid 200 Times
If there’s one thing Jennifer Coolidge is going to do, it’s ooze a voracious, borderline, otherworldly sexual charisma. Luckily, the producers of American Pie recognized that in her immediately, and cast her as Jeanine Stifler, a.k.a. the resident hot mom of the franchise. That role, in turn, did wonders for her sex life, Coolidge told Variety. “I got a lot of play at being a MILF and I got a lot of sexual action from American Pie,” she said in an interview published Wednesday. “There were so many benefits to doing that movie. I mean, there would be like 200 people that I would never have slept with.” Bestowed with MILF status, however, Coolidge has moved on to what she considers the pinnacle of her career (so far): the wealthy, slightly unhinged vacationgoer Tanya in Mike White’s The White Lotus. To Variety, she called the role “one of the greatest things that ever happened to me,” and “a killer job that no one else thought I could do.”
Read it at Variety
CNN accidentally sent welcome baskets to employees who had been laid off after the CNN+ streaming service flopped
-
CNN accidentally sent welcome baskets to employees who were laid off after CNN+ shut down.
-
CNN+, a paid subscription service, launched in late March and shut down weeks later.
-
The shuttered streaming service left hundreds of employees out of jobs, the Wall Street Journal reported.
CNN accidentally sent welcome baskets to employees who were laid off after the CNN+ streaming service shuttered.
The paid streaming subscription service launched on March 29 and announced it was shutting down on April 21, Insider previously reported.
A week later, hundreds of laid-off staffers received welcome gifts, some of which had encouraging notes attached, according to the Wall Street Journal.
“This is an incredible time to be part of CNN,” one note said, per WSJ. “Build relationships and take time to connect with colleagues and learn so that you make the most of your time here.”
CNN told WSJ the baskets – which included branded gear, pens, headphones, and a popcorn maker – were sent by mistake.
CNN spent as much as $250 million on the launch and saw meager audience engagement out of the gate, never surpassing 10,000 viewers at any given time, per CNBC.
Company insiders blamed former CNN president Jeff Zucker and departed WarnerMedia CEO Jason Kilar for the failure.
“This was all ego. All a power play for a bigger job or independence. Hubris. Nothing more,” one former WarnerMedia exec said of Zucker, Insider previously reported. “The only people who ever thought this was a good idea either worked at CNN or were trying to get CNN + to hire them. Nobody else.”
Many CNN+ employees started in the last six months or even mere weeks before the March launch, per WSJ. Employees who do not find internal CNN roles will receive six months’ severance if they don’t leave the company within 90 days.
A former designer for CNN+, who spoke to Insider on the condition of anonymity, said they had only worked for CNN+ for a few months when they found out the service was shutting down.
“I remember texting my roommates and telling them I was getting fired,” the employee told Insider. “Everyone was utterly shocked.”
Read the original article on Business Insider
The company behind celebrity cameo videos has laid off a quarter of its workers
Cameo, the company that lets you pay a celebrity to record a custom message or hop on a video call with you, has announced that it’s laying off 87 people, or around a quarter of its staff, according to The Information. According to the report, employees got the news at an all-hands meeting on Wednesday.
The company’s co-founder and CEO Steven Galanis says the layoffs are a “course correction” after Cameo grew massively during the pandemic. The company went “from just over 100 to nearly 400” employees during lockdown, according to Galanis’ statement to Variety. Since then, he says, “market conditions have rapidly changed.” Early in 2021, Variety reported that the company’s revenue was 4.5 times higher in 2020 than it had been in 2019. Galanis told the outlet the success was partially because so many actors turned to the platform after other projects were put on hold, and predicted that they would stick around.
It sounds like that prediction didn’t entirely pan out, given that the company is now shrinking its workforce by a sizable amount.
On Twitter, Galanis asked other companies to hire the members of the “Cameo Fameo” that have been laid off. While it’s a nice sentiment, the tone is… awkward, to say the least. Executives saying that their company is like family and then letting a large chunk of employees go is unfortunately nothing new, and it’s almost always uncomfortable to see corporate culture crash into the realities of capitalism. But using a cutesy name for your workers in the context of publicly announcing layoffs is probably not going to soften that blow.
(Also: I do understand that CEOs probably face an emotional toll when letting people go — they’ve let down people who put their livelihoods in their care. But they mayyyybe shouldn’t call it a “brutal day at the office,” given that it was likely way worse for the people actually losing their jobs.)
Galanis isn’t necessarily known for his tact, though; in March he reportedly said that Web3 was like Europe’s colonization of the Americas, making an analogy about trading beads for the island of Manhattan. This was, apparently, meant to make Web3 seem like a good thing. In his statement to Variety regarding the layoffs, Galanis said that he wanted to make sure the company had “time and space to nurture newer business segments like Cameo for Business, Represent and web3.” On Tuesday, the company announced its latest Cameo for Business venture; a partnership with Snap, Inc where advertisers will be able to hire Cameo performers to appear in ads on Snapchat.
Cryptoverse: Bitcoin could be laid low by miners’ malady
Feb 22 (Reuters) – Bitcoin miners are feeling the heat – and the pain’s rippling downstream to pressure prices.
The cryptocurrency’s spectacular rally in 2021 drew thousands of entrants into mining, or producing new coin. As a result the hashrate, or combined computational power used by bitcoin miners globally, has roughly quadrupled over the past six months to blow past 200 million “terahashes” per second.
But what’s that got to do with the price of bitcoin?
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A rising hashrate makes it becomes harder for miners to earn coin and cover their costs of hardware, electricity and staff – so many are more likely to sell, rather than hold, their newly minted cryptocurrency, exerting a bearish force on the market.
“Running costs are a major factor in miners’ decision to hold or sell newly acquired coins. They are the first and most natural sellers in the crypto space and so definitely impact prices,” said Justin d’Anethan, institutional sales director at crypto financial services firm Amber Group.
The total value of coins held in miners’ wallets has fallen to around $75 billion from $114 billion at the start of November, as their profitability has been squeezed by the rising hashrate as well as falling prices, according to Oslo-based crypto research firm Arcane Research.
Miners have been transferring more coins to exchanges than adding to reserves, according to crypto industry analytics firms, a sign of selling or intent to sell.
Such flows are adding to pressures facing bitcoin , whose drift towards the mainstream has seen it caught up in a selloff in global markets driven by tensions on the Ukraine border and the Federal Reserve’s policy tightening.
The world’s dominant cryptocurrency is trading at about $37,400, which is 40% below its Nov. 10 high of $62,000.
WHAT IT COSTS
Bitcoin mining, in simple terms, is the process by which a network of computers checks and validates a block of transactions that then get added to the blockchain. Miners get rewarded for completing a block.
It’s an expensive business, though, requiring not just sophisticated and fast “rigs” costing upwards of $10,000, but also a huge amount of power. And it’s getting pricier.
The seven-day average of total mining cost per transaction validated has fallen to $176.8 from a record $235.57 hit in May last year, data from blockchain.com shows.
“As more miners join the network, each individually earns fewer bitcoin. This is because network difficulty increases in order to slow the issuance of new bitcoin,” said Joe Burnett, analyst at infrastructure and mining firm Blockware Solutions.
Waning mining profitability is also hitting the broader market because some institutional investors, who are unable or unwilling to invest directly in cryptocurrencies, instead buy shares of listed miners or ETFs that track miners as an alternative way of gaining access to the young industry.
Shares of U.S.-listed crypto miners Marathon Digital Holdings (MARA.O) and Riot Blockchain (RIOT.O) have plunged 66% and 52% respectively since early November.
The Valkyrie Bitcoin Miners ETF (WGMI.O) is meanwhile trading at a roughly 5% discount to its net asset value since the fund’s launch in early February, and the Viridi Clean Energy Crypto-Mining & Semiconductor ETF has lost 23% since the beginning of the year.
THE LAST BITCOIN
Some of the pressures on miners flow from bitcoin’s inherent structure. The decentralised blockchain was created anonymously with a final limit of 21 million coins, of which nearly 19 million has already been minted.
It takes around 10 minutes to mine one block and the reward for miners – who currently get 6.25 bitcoin per block – is halved about every four years.
“There could be one miner or a million, it doesn’t change anything. There’s only one block and a set number of bitcoins issued,” said d’Anethan at Amber Group.
A final note: don’t lose sleep fretting about what will happen when the last bitcoin is mined – that’s not expected until the middle of the next century, 2140 to be exact.
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Reporting by Lisa Mattackal and Medha Singh in Bengaluru; Additional reporting by Alun John in Hong Kong and Vidya Ranganathan in Singapore; Editing by Vidya Ranganathan and Pravin Char
Our Standards: The Thomson Reuters Trust Principles.