Cryptocurrency giant Binance has reduced employee benefits and laid off more than 1,000 workers in response to declining profits, despite CEO Changpeng Zhao stating the company remains profitable and unaffected by an ongoing Securities and Exchange Commission lawsuit, according to a report by the Wall Street Journal.
The cuts, including mobile-phone and fitness reimbursements and work-from-home expenses, are a result of the need for greater financial prudence, with the company also indicating potential future layoffs.
Some employees terminated last week were offered severance pay in Binance's own token, BNB, under the condition of signing a termination agreement that included a non-disparagement clause.
Amid regulatory challenges and legal scrutiny, the crypto titan has also laid off over a thousand employees worldwide, which could potentially affect more than a third of its workforce, previously around 8,000. Despite these layoffs, Binance CEO Changpeng "CZ" Zhao disputes media-reported figures and asserts the company is still hiring.
On top of that, three senior executives have reportedly resigned due to concerns about Zhao's handling of an ongoing U.S. Department of Justice investigation. This executive exodus, which follows a series of global regulatory challenges for the cryptocurrency exchange, including lawsuits from the SEC and CFTC, is likely to complicate the company's defense efforts.Zhao has dismissed reports of key executive departures from the cryptocurrency exchange, asserting that staff turnover is common in every company and that the reasons speculated by the news are incorrect.
This comes amid regulatory scrutiny globally, with top executives reportedly leaving due to the company's handling of Department of Justice investigations, and news of the company asking US staff to either relocate offshore or face layoffs.