Following its Q1 2023 profit, Huobi expects an even bigger net income haul of $110 million for the second quarter.
Crypto exchange Huobi reportedly made a tidy $30 million in profit for Q1 following a restructuring. The Seychelles-based company’s return to profitability came after cutting down its workforce and benefits accruable to employees.
According to Huobi Global’s de facto owner Justin Sun, the exchange realized a quarterly revenue of $150 million against $120 million in expenditures. Sun further explained that Huobi took “a large number of measures were taken to reduce costs and increase efficiency” in the first quarter. Following the profitable outing, he estimated that the exchange would rake in a net income of $110 million for the second quarter of 2023. These projections are based on Huobi realizing an even bigger revenue haul of $187 million and incurring a lesser $76 million in expenses.
Huobi laid off 20% of its staff force and slashed employee benefits earlier this year to remain competitive and profitable. Furthermore, the exchange switched the employment contracts of affected staff to “advisory contracts” not protected by Chinese labor laws. Huobi executives also allegedly imposed a messaging ban on all major employee chat groups.
Employees affected by Huobi’s restructuring plans have sought counsel advice in a labor dispute to oppose some changes. For instance, one aggrieved employee wrote:
“I love my company and my job; at the same time, I support all decisions that benefit the company, and I know that with economies recessionary everywhere in the globe, Huobi management staff must tighten their belts, and I can understand the lack of year-end bonuses. That said, I cannot accept the unreasonable swap of employment contracts. I will fight this to the end.”
Affected Huobi employees also formed a 400-member strong “rights maintenance group” in light of the company’s actions.
Huobi Q1 Profit Comes as Welcome Development Following Harrowing Sustained Period
The Huobi Q1 2023 profit development also comes after trying times for the popular crypto exchange. Once one of the largest exchanges by trading volume, Huobi experienced a user exodus in 2021. At the time, the company sustained an off-boarding of mainland Chinese users, plunging its market share over a sustained period. Between 2020 and the fourth quarter of 2022, Huobi’s valuation crashed from 19% to just over 2%. Last November, Sun reportedly purchased 100% of Huobi’s stake from its co-founders last November through his entity About Capital. The crypto entrepreneur and TRON founder currently claims to occupy an “advisory” role at the exchange.
Huobi Token March Crash
Huobi suffered a major incident early last month when its native token HT experienced a flash crash. Although this incident dragged HT’s value down by more than 90% within hours, the crypto has since recouped most of its losses. As of press time, HT is changing hands at $3.65 and has traded between $3.58 and $3.69 in the last 24 hours. However, one major user claims a $4 million loss on Twitter due to margin liquidations during the flash crash. Furthermore, the user also revealed that they are yet to receive full compensation from Huobi despite Sun’s claims of such.