Polygon Labs, the team behind the Ethereum scaling project Polygon, has slashed its workforce by 20% as part of its consolidation announced earlier this year. The native MATIC token felt the impact as it has fallen by more than 7% in the last 24 hours.
Polygon Labs announced the layoff in a company blog post on Tuesday, February 21st. This cut in staff is part of its restructuring to weather the ongoing crypto winter and the 5-year strategy to become an integral part of Web 3 by scaling Ethereum.
Consolidation Sends Home 100 Employees
Sandeep Nailwal, the co-founder of Polygon, took to Twitter to further elaborate on the decision. According to him, Polygon has grown exponentially and to continue this success story, they have crystallized a “strategy for the next 5 years to drive mass adoption of web3 by scaling Ethereum”.
A big part of this strategy includes unifying all of our teams under Polygon Labs to drive more growth.
As part of this consolidation process, we’ve made the difficult decision to reduce our team by 20% impacting multiple teams and about 100 positions.
— Sandeep | Polygon 💜 Top 3 by impact (@sandeepnailwal) February 21, 2023
As a part of this strategy, the management of the project has unified all its teams and business units under the name Polygon Labs. This consolidation strategy has forced the management decided to cut staff by 20%.
The announcement reads:
“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. This was a painfully hard decision, but a necessary step in our journey.”
As per the announcement, impacted employees will receive three months of severance pay, regardless of their level or time at the company.
Sandeep Nailwal noted that the firm is in good financial shape with a balance of more than $250 million and more than 1.9 billion MATIC in its treasury.
The native MATIC also felt the impact of the news as it is more than 7% down in the last 24 hours at the time of writing.
The layoff has come after Bhumika Srivastava, the firm’s head of human resources, in September 2022, said that Polygon Labs would continue to hire despite choppy market conditions. In an interview with Bloomberg, she said that Polygon had plans to increase its headcount by 40%.
Polygon was well placed to hire at that time having raised $450 million in a private token sale in February 2022, led by Sequoia Capital India. However, the FTX blowout in November 2022 led to turmoil in the crypto market which was already suffering from Terra collapse.
This bad patch for crypto has forced many crypto giants to seek bankruptcy protection and many to cut their workforce to remain intact. January 2023 has been the second worst month for crypto layoffs with as many as 2,806 people losing their jobs.
Polygon has also felt pressure from this crypto winter. Nevertheless, Polygon Labs working on many projects to come to the forefront of Web 3 adoption. As reported, Polygon zkEVM, a new layer-2 scaling solution for Ethereum by Polygon Labs, will go live on the mainnet in March 2023.