Polygon Labs Cuts 20% of Workforce Amid Crypto Market Woes

Polygon Labs, a platform facilitating Ethereum accessibility, has announced the layoff of 20% of its workforce (100 employees). The decision follows the consolidation of business units earlier this year. Affected employees will receive three months of severance. Polygon, initially named Matic, has witnessed the loss of over a trillion dollars in crypto value over the past year due to economic concerns.

Polygon Labs Lays Off 20% of Workforce Amidst Crypto Market Slump

Bengaluru, February 21, 2023 (Reuters) - Polygon Labs, the blockchain platform that supports the Ethereum network, has announced the layoff of 100 employees, representing approximately 20% of its workforce. The move is the latest in a series of downsizings within the digital asset industry, as companies grapple with the ongoing crypto market downturn.

Polygon Labs stated in a company blog post that all affected employees will receive three months of severance pay, irrespective of their seniority or duration of employment. The company's decision follows its recent consolidation of several business units.

Founded in 2017 as Matic, Polygon Labs rebranded in February 2021. As a decentralized platform, it simplifies access to the Ethereum blockchain, which hosts the second-largest cryptocurrency by market capitalization. However, the crypto sector has been plagued by significant losses over the past year, with over a trillion dollars wiped out in value due to rising interest rates and concerns about an impending economic recession.

The market downturn has triggered high-profile bankruptcies, including those of prominent crypto hedge fund Three Arrows Capital and digital asset lending platform Celsius Network. The most significant blow came with the sudden collapse of major cryptocurrency exchange FTX in November, which has prompted heightened regulatory scrutiny worldwide.

In January, Digital Currency Group-owned cryptocurrency exchange Luno announced job cuts affecting 35% of its employees in response to the worsening market conditions. As the crypto industry continues to navigate these challenges, Polygon Labs' layoffs serve as a stark reminder of the impact that the downturn is having on companies operating within this space.