Polygon lays off 20% staff as crypto blues continue

He said the layoffs are part of a restructuring of the layer-2 blockchain company.

The development comes at a time when the cryptocurrency sector has been witnessing a prolonged down-cycle.

“The treasury remains healthy, with a balance of more than $250 million and more than 1.9 billion Matic (Polygon’s native token), and we have crystallised our strategy for the next several years to help drive mass adoption of web3 by scaling Ethereum,” Nailwal wrote. “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.”

In February last year, Polygon had raised $450 million by issuing Matic to 40 marquee venture capitalist investors including Sequoia Capital, SoftBank Vision Fund II, Tiger Global, Elevation Capital, Accel Partners and Steadview Capital.

Price of the Matic token at the time of the fundraise was around $2.05 apiece, and as of Tuesday evening press time, it was trading at $1.47, after having hit a low of $0.40 in June, according to information sourced from coingecko.com. In comparison, the Ethereum token has fallen from $3,127 in February last year to $1,700 as of Tuesday.

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“Impacted employees will each receive three months of severance pay, regardless of their level or tenure at Polygon Labs,” Nailwal wrote in the blogpost.Founded by Nailwal, Jaynti Kanani and Anurag Arjun, Polygon had received a “sizable investment” from US-based billionaire Mark Cuban in 2021. It had also onboarded Mihailo Bjelic from Serbia as a cofounder that year. In 2019, Polygon’s token was distributed through Binance’s initial exchange offering, and the startup had raised over $5 million.

Last month, Polygon had announced restructuring of its corporate entities that unified all of its employees under a group of companies referred to as Polygon Labs. The restructuring would help the company organise and facilitate operations, it had said.

In January, several global cryptocurrency players had undertaken layoffs as they attempted to rein in costs.

Cryptocurrency exchange Gemini slashed 10% of its headcount last month, in what was at least the third round of layoffs in eight months.

On January 10, Coinbase Global Inc had said it would reduce its workforce by about 950 employees as part of a restructuring plan, in a third round of layoffs for the cryptocurrency exchange since last year.