Compass Mining Searches for Direction After Top Execs Resign
Staff has been slashed by 15%, while senior employees and execs have taken a 50% paycheck cut, the miner said
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- Compass was recently accused of failing to pay an electricity bill
- Crypto miners have been selling bitcoin to meet operating expenses
Cryptocurrency mining and hosting firm Compass Mining is eliminating staff after two top executives stepped down last week, admitting it “grew too quickly.”
In a statement on Thursday, the firm’s recently appointed interim CEOs Thomas Heller and Paul Gosker said the size of the team would be reduced by 15%. Senior employees and the executive team have taken pay cuts of up to 50%, they added.
While Compass’ website doesn’t point to a specific employee headcount, its LinkedIn lists 83 employees. That suggests about 13 people have lost their jobs.
“While painful, these changes will enable Compass to stay agile and well-positioned in this evolving market, which has challenged many of our industry peers,” the interim CEOs wrote.
“Of all the decisions we have had to make as new CEOs, this will be far the hardest, and we take full responsibility for all of the changes that have been, and will be made, under our leadership.”
Compass appointed Heller and Gosker on June 28 after former CEO Whit Gibbs and Chief Financial Officer Jodie Fisher resigned. While the reason for their resignation was unclear, Compass acknowledged the “setbacks and disappointments” that detracted the company from its objective to make crypto mining easy and accessible.
In late June, the company faced accusations by hosting firm Dynamics Mining over an alleged failure to pay power compensation charges. Compass denied the claims and said Dynamics operated only about 1% of its contracted capacity.
“Compass has performed all of its obligations under its contracts with Dynamics, including its financial obligations,” it said in a statement.
The downturn in cryptocurrency markets, alongside a liquidity crisis in the crypto lending space, has forced several companies to cut costs or let go of employees. Exchanges and lenders including Coinbase, BlockFi, Gemini, Crypto.com, Vauld and Bullish are just some of the well-known names affected.
Bitcoin miners seem to be the next on the chopping block — some have been selling their mined bitcoin due to revenues slumping along with the bear market, said Marcus Sotiriou, analyst at digital asset broker GlobalBlock.
Driven by recent market turmoil and rising energy costs, Core Scientific said on Tuesday it sold 7,202 bitcoin for about $167 million in June — leaving the miner with just 1,959 bitcoin and about $132 million in cash. Meanwhile, Argo Blockchain, Bitfarms, Riot and CleanSpark have also sold their bitcoin reserves to pay for operating expenses.