Huobi is looking to climb its way back into the international rankings of crypto exchanges following recent restructuring efforts. In fact, the dividends from their decisions are starting to pay off a lot sooner, as the company has reported net income of $30 million in the first quarter this year.
The $30 million in income was thanks to a respectable $150 million in income, subtracted by their expenses of $120 million. Their recent restructuring efforts focused more on reducing their costs, while growing an increasing revenue.
While their efforts to reduce costs have been controversial, they also have some good ideas on how to improve revenue. Therefore, Huobi owner Justin Sun predicts that they will be able to increase revenue to almost $190 million, while reducing their expenses to a shy $76 million.
Huobi’s Fall from Grace
While Huobi might seem like a fairly small company with all of its restructuring efforts, it is far from it. Huobi was a major international crypto exchange, which at a time held 19% of the global market share.
However, this once major crypto exchange quickly fell from the top of the charts when a large population of its Chinese audience quickly moved away from the platform. As more and more Chinese traders off-boarded from the exchange, it proceeded to shrink significantly.
Huobi, which had 19% of the total market share of crypto exchanges in 2020, quickly found itself at around 2.2% in the fourth quarter of 2022. As a result of the company falling from such lofty heights, the advisor of the firm Justin Sun quickly purchased 100% of the company’s stake from other shareholders.
With Sun becoming the defacto owner of the entire company, he made major changes to the company to ensure that it slowly climbs back to its original place of power. While some of these changes have been a little controversial, they have also been very effective at increasing the brand’s popularity.
Not only do many customers know about Huobi, but many investors know about it as well. And with the attention that it has managed to garner, it can slowly start building itself back up. More specifically, it can go toe-to-toe with other big names like Binance.
Controversial Changes to the Existing Formula
Although it is certainly admirable that Huobi is looking to make a major comeback, they are doing it at the cost of some major decisions. One of the biggest ways that they will be able to increase income is by reducing their expenses, and they will be able to do that by reducing employee benefits.
News about this change quickly made the rounds on social media. Many voiced their discontent with the company and how it is not properly compensating it’s employees. Furthermore, it also came to light that the company laid off a large percentage of it’s workforce right before announcing quarterly earnings.