Crypto firm Polygon Labs lays off 20% of workforce as rout worsen

Polygon Labs, the operator of the so-called protocol used by developers to make Ethereum transactions faster and cheaper, said Tuesday it has laid off 20% of its workforce, or about 100 employees, making it the latest digital asset firm to cut jobs. .

Polygon has 500 full-time employees. In a blog post, the company said each of the affected employees will receive three months' severance pay, regardless of their level or tenure at the company.

According to the statement, the company's coffers remain "healthy" with a balance sheet of more than $250 million.

Aggregation process

The layoffs come after Polygon Labs merged multiple business units earlier this year. On January 11, Polygon announced its corporate restructuring that now “consolidates all of our employees under a group of companies known as Polygon Labs.

Earlier in December, the company had also made adjustments to its community programs which saw sunsetting of grants and winding down of its DAO or decentralized autonomous organization.

Polygon, primarily an open-source blockchain, also had entities Polygon Studios, its NFT, gaming and metaverse arm, associated with it. Under the new structure the name and brand “Polygon Studios" will be discontinued and Polygon Foundation, based in Cayman Islands, will entirely own the newly created Polygon Labs.

In 2022, Polygon raised $450 million in a private token sale and has been on an expansion spree and also partnered with many global conglomerates on various web3 related projects and also poached developers from its rivals.

The decentralised platform that makes digital coin Ethereum more accessible was founded back in 2017 as Matic and was rebranded to Polygon in February 2021

Over trillion dollars in value have been wiped out from the cryptocurrency sector in 2022 as rising interest rates exacerbate worries of an economic downturn.

The crash led to high-profile bankruptcies of key industry players such as crypto hedge fund Three Arrows Capital and Celsius Network.

The biggest blow to the crypto sector came after major exchange FTX filed for bankruptcy protection in November last year. Its swift fall has sparked tough global regulatory scrutiny of how cryptocurrency companies hold funds and conduct business operations.

The layoffs coincide with deep job cuts across the industry after the collapse of token prices in 2022, including at Coinbase Global, Blockchain.com and Crypto.com. Firms have collectively shed hundreds of jobs in the first two months of 2023 alone