Crypto technology firm Polygon eliminates 20% of workforce

POLYGON Labs, the operator of an eponymous protocol used by developers to make Ethereum transactions quicker and cheaper, has cut 20 per cent of its workforce, or around 100 employees, as part of a consolidation of business units.

The impacted employees will receive three months of severance pay, the firm said in a blog post on Tuesday (Feb 21). The treasury of the company remains “healthy” with a balance sheet worth more than US$250 million, according to the statement.

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

On Jan 11, Polygon announced its corporate restructuring which now “unifies all of our employees under a group of companies, referred to as Polygon Labs”. In December, Polygon had also made adjustments to its community programmes which saw sunsetting of grants and winding down of its DAO or decentralised autonomous organisation.

Polygon, primarily an open-source blockchain, also had entities Polygon Studios, its non-fungible token (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.

Last year it raised US$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. In an earlier interview with Bloomberg Polygon said that they had 500 full-time employees.

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Many projects and developers from the failed Terra stablecoin ecosystem moved to Polygon last year and most recently DeGods and Y00ts, two of the top NFT projects on the Solana blockchain, also migrated to Polygon. BLOOMBERG