- Polygon Labs has laid off 100 employees as part of a corporate restructuring.
- Impacted workers will receive three months of severance pay.
- Polygon Studios was dissolved and all operations were consolidated under Polygon Labs.
Polygon Labs, creators of a decentralized Ethereum scaling platform, has laid off 20% of its employees, affecting around 100 people, as part of reorganizing the company’s business units. In an official announcement by the firm, Polygon Labs stated that the move was necessary, adding that it was a challenging and painful decision.
Polygon’s Layoffs Begin
The release stated:
” Our departing teammates have played a historic part in building the Polygon technology and ecosystem to be the globally recognized blockchain it is today. These individuals will always be a part of the 0xPolygon community, and we sincerely thank each and every one of them.”
The statement also communicated that the affected employees would receive three months of severance pay. The company affirmed that its treasury was well funded, adding, “The treasury remains healthy, with a balance of more than $250 million and more than 1.9 billion MATIC.”
Polygon Labs has joined the long list of companies in the crypto industry doing layoffs. This is a result of the drop in prices of tokens in the market triggered by the collapse and bankruptcy of notable firms in the industry, including Terra-Luna and FTX. Despite cryptocurrency prices experiencing a rise in 2023, with most of them increasing by double digits, most crypto companies and even tech giants have continued to cut back their workforce in preparation for the looming recession.
Resultantly, major corporations such as Spotify, Google, Capital One, Microsoft, Amazon, Crypto.com, BlackRock, Coinbase, Goldman Sachs, and Genesis Trading have performed mass layoffs even to the thousands, with Polygon Labs being the most recent.
Polygon co-founder, Sandeep Nailwal, commented in a Twitter post that this move was part of the bigger plan to consolidate all their teams under Polygon Labs to accelerate growth. He also reiterated that the company’s finances were still healthy.
However, the status of the company’s treasury raised questions and concerns on Twitter, given that the firm had raised $450 million in a private token sale. One Twitter user asked,” You just raised 450M last Feb/22. Does that mean you spent 200M? Surreal”.
In response, Sandeep stated that $100 million had been used in a venture fund.
On the 11th of January, Polygon announced that it was undergoing a corporate restructuring that “unifies all of our employees under a group of companies, referred to as Polygon Labs.”
The announcement stated:
“This restructuring helps organize and facilitate operations. While there’s no impact on the community, the protocols nor the employees, or the day-to-day operations of Polygon Labs, we wanted to share the update as you’ll begin to see Polygon Labs in place of Polygon Studios.“
Before the restructuring, Polygon Labs was the umbrella of all companies comprising all employees in the Polygon ecosystem. It contained Polygon, mainly an open-source blockchain, and Polygon Studios, the NFT, gaming, and metaverse division. However, due to the restructuring, “Polygon Studios” was discontinued. The Polygon ecosystem remained under the ownership of the Polygon Foundation based in the Cayman Islands.
According to the statement, the Foundation neither controls Polygon nor Polygon Labs, and its central role is to support the ecosystem.