Argo blockchain to cut cost by 35 percent by suspending mining contracts

As per a strategy update by the Argo Blockchain, a United kingdom based cryptocurrency mining firm, the company declared that it was looking at realigning its business activities as part of a significant cost-cutting process.

The company stated that it would suspend all the related activities pertaining to Mining-as-a-Service (MaaS) by April and would only concentrate only on direct mining activities.

Argo Blockchain is headquartered in London with facilities in Quebec. The Company’s shares are listed on the major market of London Stock Exchange under the ticker: ARB.

Mining-as-a-Service operator assists companies in cryptocurrency mining via hired hardware remotely. Further, Argo stated that the decision to cut down on the cost is due to the ongoing fall in the Bitcoin prices which has resulted in a decrease in profit margins in mining activities.

The strategy update stated, “The redeployment of the mining infrastructure and capital is expected to be profitable following a material reduction in input costs achieved from suppliers. As part of the restructuring, the company is implementing significant cost-cutting which is expected to lower its mining cost base, including ongoing expenses, by 35%. The restructuring measures and strategy refocus are expected to reduce the overall cash burn and deliver EBITDA (earnings before interest, taxes, depreciation, and amortization) break-even in the second half of 2019.”

Argo Blockchain is planning to reduce costs by more than a third with the suspension of MaaS activities and thereby try to meet its profitability target effectively.

CEO and co-founder Mike Edwards stated, “We are being proactive and strategic in light of the tough industry market conditions by taking swift action to cut costs and refocus our strategy. While it is disappointing to make this shift after delivering better-than-expected growth during our first six months as a consumer business, we need to be prudent and act decisively in order to ride out the downturn and be in a strong position when industry fundamentals improve.”

Due to the ingoing grey crypto market and the continuous fall in the crypto prices, the Bitcoin mining is suffering from tough times which has also resulted in several companies associated with such business line to bear the heat and shut business.