Polygon Labs, a decentralized platform that makes the digital currency Ethereum more accessible to users, revealed on February 21 that it had laid off 100 employees, or approximately 20% of its workforce, following the consolidation of several of its business units.
This move is the most recent round of layoffs in the digital asset market, which has endured a challenging year due to rising interest rates and regulatory scrutiny. More than a couple of large crypto companies reported layoffs in January alone.
Laid Off Polygon Staff to Receive 3 Months Severance Benefits
As reported by Reuters, the company, established in 2017 as Matic and rebranded as Polygon in February 2021, announced that each employee, regardless of position or length of service, will receive three months of severance pay.
Polygon stated in a blog post that their treasury is solid despite the layoffs, with a balance of more than $250 million and more than 1.9 billion MATIC. The company also remarked that it has "crystallized" its plan for the coming years in order to promote the widespread adoption of web3 through scaling Ethereum.
Polygon has been making traction in the sector and has collaborated with key firms such as Google and Coinbase. Polygon's ecosystem is constantly developing, with a total value locked (TVL) of $15 billion, thanks to the company's innovative solutions.
A Tough Year for Crypto Companies
In 2022, the crypto market crashed, crashing over a trillion dollars' worth of value, heightening fears of an economic recession.
The so-called 'crypto winter' resulted in the high-profile bankruptcy of key industry players, including the crypto hedge fund Three Arrows Capital and Celsius Network, which became the first major crypto enterprises to crash in 2022, AA.com reports.
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In November 2022, the most significant blow occurred when the major exchange FTX filed for bankruptcy protection. Its collapse has prompted a global regulatory crackdown on how crypto companies store funds and do business.
Based on a report by Reuters, the digital asset industry has been undergoing a time of uncertainty due to the regulatory landscape, which has resulted in some companies battling to remain solvent - leading to job cuts.
A Timeline of Recent Crypto Firms
January 10 - Coinbase second wave of layoffs
Coinbase, a crypto exchange, announced it would be laying off 20% of its workers or 950 staff of its total workforce in order to save resources amid the bear market in the sector at the time.
January 18 - Amber Group cut its workforce in half
As the price of bitcoin plummeted, the cryptocurrency startup Amber Group started cutting spending and personnel across the board. According to reports, the corporation has halved its Hong Kong workforce to 40 employees, slashing roles in technology, risk management, audit, and compliance.
Amber was founded in Hong Kong in 2017 and is backed by prominent investors such as Sequoia Capital China and Temasek Holdings.
January 25 - Luno laid off 35% of global workforce
Luno, a cryptocurrency exchange based in London, has announced the layoff of 35% of its global workforce. The company is a subsidiary of the Digital Currency Group, which has offices in Africa, South East Asia, and Europe.
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