Ethereum Layer-2, scaling solution Polygon, has announced that it has laid off around 20% of its existing workforce, as part of a wider company restructuring, according to sources.
The announcement regarding the layoffs comes nearly a year after the layer-2 scaling solution had raised $450 million in a funding round led by Sequoia India.
20% Of Employees Laid Off
Layer-2 startup Polygon has become the latest company in the crypto space to announce layoffs, with the company set to lay off 20% of its workforce in the coming few days. According to the company, the layoffs are a part of a broader company restructuring, thanks to the ongoing crypto winter. Polygon had consolidated multiple businesses under the Polygon Labs banner, with the current layoffs seen to be a part of the same process. The layer-2 scaling solution elaborated in a blog post, stating,
“Earlier this year, we consolidated multiple business units under Polygon Labs. As part of this process, we’re sharing the difficult news that we’ve reduced our team by 20%, impacting multiple teams and about 100 positions.”
Polygon also added in the blog post that the employees impacted by the layoffs would receive three months of severance pay. This will be paid out regardless of their tenure at the startup or their level. The decision to cut 20% of the company’s workforce has impacted around 100 employees at Polygon and was described as a necessary measure by the Polygon team.
“Our departing teammates have played a historic part in building the Polygon technology and ecosystem to be the globally recognized blockchain that it is today.”
Treasury Remains Healthy
The Polygon team also stated that it has been able to crystallize its strategy for the next five years to drive the mass adoption of Web 3.0 through the scaling of Ethereum. It also added that its treasury remained very healthy, with a balance of over $250 million and an additional 1.9 billion MATIC tokens.
“The treasury remains healthy, with a balance of more than $250 million and more than 1.9 billion MATIC, and we have crystallized our strategy for the next several years to help drive mass adoption of web3 by scaling Ethereum.”
A huge part of Polygon’s strategy is the inclusion of all its teams under the Polygon Labs banner to help drive more growth. However, according to Polygon co-founder Sandeep Nailwal, these changes would not impact the day-to-day functioning and operations of Polygon Labs. Polygon Labs is a group of companies owned by the Polygon Foundation, which is made up of employees that participate in the larger Polygon ecosystem.
The entity is also the owner of the funds used by the organization and the assets developed by them. The foundation is based in the Cayman Islands and has several of the protocol’s co-founders as members of its board of directors to support Polygon and Polygon Labs. The firm had stated at the beginning of the year,
“It is decentralized technology existing at the behest of validators and other third parties. Polygon neither has, nor could have, any employees since it represents a series of decentralized, and generally open source, technology.”
Other Firms That Have Fired Employees
The news of the layoffs comes nearly a year after the scaling solution had managed to raise around $450 million in a funding round led by Sequoia Capital India. The funding round saw participation from a host of major VC firms, including SoftBank, Galaxy Interactive, Galaxy Digital, Tiger Global, Republic Capital, and others.
However, with the layoffs, Polygon joins a long list of Indian startups that have laid off employees as funding dries up. These include Chargebee, Cars24, Byjus, LEAD, Ola, Oyo, and Meesho. Additionally, it was reported on Monday that community and security management startup MyGate had laid off 30% of its workforce.
Additionally, the crypto ecosystem has also seen a wave of layoffs, with the prolonged crypto winter and unfavorable regulatory climate having a considerable impact on firms. At the beginning of the year, Coinbase announced that it was laying off around 1000 employees. This was the company’s second cull in a year. Huobi also announced that it was planning to lay off 20% of its staff, thanks to the downturn in the crypto markets and the collapse of FTX. In 2022, Crypto.com also announced that it was firing around 260 employees to optimize profitability better.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.