Edit December 3, 2024 (2:54pm EST): Blockspace originally reported that Foundry laid off 60% of its workforce, but Foundry management disputed this figure after publication, citing 27%. Blockspace received different figures from multiple sources on the total head count reduction from Foundry, while not receiving an initial number from Foundry before publication. Additionally, the original version of this article mentioned that Foundry would be gutting its hardware and ASIC repair business lines entirely; Foundry management disputed this, saying that the hardware line would be deprioritized and the repair line kept intact.
Foundry, the world’s largest Bitcoin mining pool, laid off nearly a third of its employees today.
CEO Mike Colyer told Blockspace that Foundry reduced its headcount from 274 to 200, a 27% reduction, of which 16% are U.S employees. Foundry management notified staff individually before discussing the layoffs in a team meeting early this afternoon.
The company is executing the staff reduction in a strategic move to shore up its main lines of revenue, per sources familiar with the matter, and it coincides with a larger effort to restructure the business. Last week, the New York-based mining firm moved about 20 staff members to a new DCG subsidiary, Yuma, per Foundry documents reviewed by Blockspace. A decentralized AI startup, Yuma pivoted out of Foundry’s internal AI arm Bittensor. Notably, DCG CEO Barry Silbert is the acting CEO of Yuma.
The layoffs and Yuma’s spinout, as well as ongoing efforts to spinoff other aspects of Foundry’s business, have impacted roughly 40-60% of the company’s employees, anonymous sources told Blockspace.
“We recently made the strategic decision to focus Foundry on our core business – operating the #1 Bitcoin mining pool in the world and growing our site operations business – while [supporting] the development of DCG’s newest subsidiaries,” reads a statement from Foundry shared with Blockspace.
“As part of this realignment, we made the difficult decision to reduce Foundry’s workforce, resulting in layoffs across multiple teams. We’re grateful for the contributions of all our employees, including those impacted by these changes.”
At the time of writing, Foundry’s bitcoin mining pool, its most notable business line, accounts for 30% of the Bitcoin network’s total hashrate. For many years, Foundry has been the informal default pool for institutional-scale and public bitcoin mining companies incorporated in the United States. According to a DCG Q3 shareholder letter, Foundry is on pace to earn $80 million in revenue from its self mining business alone for 2024, while the company earned $35 million in revenue from all business lines in Q3.
Foundry also operates significant business lines across other Bitcoin mining and general compute verticals, including self-mining, custom hardware, ASIC repairs, site operations, firmware, and decentralized AI infrastructure. Foundry launched many of these business lines – namely, specialized hardware, site operations, and repairs – after 2022, following the collapse of its sister entity Genesis, a subsidiary of their shared parent company Digital Currency Group (DCG).
Foundry dismissed employees from each of its business lines, Colyer said, adding that the company is choosing to deprioritize its hardware line.
Foundry Digital was founded in 2017 under the umbrella of DCG. Until recently, Foundry offered the most competitive mining pool fee rates in the industry, often extending 0% fees to its largest clients. For a brief stint in 2020 and 2021, Foundry also originated ASIC-backed loans.
The layoffs are the latest chapter in DCG’s saga to repair its battered crypto empire. DCG’s crypto lending and trading subsidiary, Genesis, went bankrupt in the cascade of insolvencies that followed FTX’s implosion. DCG purportedly sunk hundreds of millions of dollars into Genesis to help remunerate creditors, but a legal dispute broke out regarding a $1.7 billion loan that Genesis claimed DCG owed its creditors. Genesis and DCG settled the dispute in August, with DCG agreeing to pay Genesis $324.5 million in cash and $158 million in cryptocurrencies. The Bankruptcy Court of the Southern District of New York reached a settlement with Genesis in May and cleared it to disburse funds to creditors.
In November of last year, DCG sold the cryptocurrency publication CoinDesk to Bullish Global for roughly $75 million.
As indicated by Foundry shuffling team members to Yuma ahead of today’s news, Foundry’s reduction in headcount appears to be part of a greater restructuring effort within the company.
