Polygon Labs, the leading operator of an eponymous protocol used by developers to make Ethereum transactions quicker and cheaper, on February 21 said that it has laid off 20% of its workforce, or around 100 employees, making it the latest digital asset firm to execute job cuts.
Notably, 500 people work full-time for Polygon. No matter their position or length of service with the company, the impacted employees will all receive three months' worth of severance pay, the company stated in a blog post.
According to the statement, the company's treasury is still "strong," with a balance sheet worth more than $250 million. The layoffs follow Polygon Labs' earlier this year merger of several company groups. Polygon announced its corporate restructure on January 11 and stated that as a result, "all of our workers are now part of the Polygon Labs group of companies." The copnpay had already announced changes to its community projects earlier in December, including the sunsetting of grants and the winding down of its DAO, or decentralised autonomous organisation.
The NFT, gaming, and metaverse arm of Polygon Studios, which is largely an open-source blockchain, is connected to Polygon. The Cayman Islands-based Polygon Foundation will fully own the newly established Polygon Laboratories under the terms of the new arrangement, which will see the name and trademark "Polygon Studios" removed.
Polygon secured USD 450 million in a private token sale in 2022. Since then, the company has been expanding rapidly, partnering with numerous multinational corporations on various web3-related initiatives, and poaching developers from its competitors.
Matic, the decentralised platform that facilitates easier access to the digital currency Ethereum, was established in 2017 and changed its name to Polygon in February 2021.
While rising interest rates heighten concerns about an economic slowdown, the cryptocurrency market has lost over a trillion dollars in value in 2022.
The crash led to high-profile bankruptcies of key industry players such as crypto hedge fund Three Arrows Capital and Celsius Network.
The main exchange FTX filed for bankruptcy protection in November of last year, dealing the crypto industry its heaviest hit. Due to its quick decline, cryptocurrency companies are now under intense global regulatory scrutiny for the way they manage funds and carry out commercial activities.
Following the fall of token prices in 2022, there will be significant job cutbacks across the industry, including at Coinbase Global, Blockchain.com, and Crypto.com, which will coincide with the layoffs. Hundreds of jobs have been lost by businesses overall in just the first two months of 2023.
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