Polygon Labs, a co-founder of Ethereum layer 2 solution Polygon Labs, has announced that 20% of the company’s staff will be laid off to “unify” the company.
Sandeep Nailwal stated that the firm will reduce its headcount to around 100 people in order to consolidate its workforce in line with a long-term strategic plan.
Polygon: Crypto Winter Not the Reason for Layoffs
Blog post states that layoffs will be the next consolidation stage after Polygon Labs has brought several business units under its umbrella. This is not the result of the crypto winter, which saw many firms shrink in recent months.
The blog post states that “our colleagues are our friends, and there is no question that we all share pride at our collective achievements to date.”
Although no mention was made about a job placement program; affected employees will receive three month’s severance pay, regardless of their previous roles. According to the post, Polygon has approximately $250 million and 1.9billion MATIC in its Treasury. MATIC, the native token of Polygon, is used to pay transaction fees and to govern and secure the network.
Jaynti Kanani and Naiwal founded the Polygon blockchain as an Ethereum sidechain to address congestion issues. This was after they noticed that CryptoKitties NFT collectors had flooded the Ethereum network with transactions. This caused disruptions and high gas prices. To speed up transaction processing speed and efficiency, a sidechain works in parallel to a mainchain.
They won several notable awards, making Polygon the NFT platform for many corporates including Reddit, Adidas, and Starbucks. Dolce & Gabbana, a luxury fashion brand, partnered with Polygon marketplace UNXD to offer holders of a DGFamily Box NT access to D&G products.
Polygon controversially paid DeLabs $3 million to migrate from Solana. DeGods moved from Ethereum to Polygon, while y00ts moved from Solana to Polygon.
The social media reaction to the layoffs was mixed. Some criticised the project for its poor business fundamentals, while others sought clarity about capital management.
The biggest problem with crypto is a lack understanding of basic business principles. This has got math wiz devs and aggressive sellers all over, but no one seems to understand how to efficiently use capital. merrimac (@ChaosCapitalLL1) February 21, 20, 2023
Many users were puzzled by the fact that the firm had used $200 million from its previous fundraise, which was over a year ago. Polygon raised $450m from venture capitalists Tiger Global and Seven Seven Six through a private token sales.
You just raised 450M in February/22. That means you have spent 200M. Surreal– Bruno (@bmaroniene), February 21, 2023
Would love to see more transparency about the 200m that passed in 1 year– tehMoonwalkeR, @tehMoonwalkeR February 21, 2023
Others called hiring and firing within a year stupid and asked why executive pay was not lower.
It’s not a bad idea, but it’s quite stupid to hire aggressively and then fire again in a matter of a year. These cases usually see the pay cut for mgmt/c-level but that is not the case with these guys lol.
One employee who was affected by the layoffs stated that he is not a bad person and believes in Polygon’s future.
Unfortunately I was one of those affected by the Polygon layoffs It was an honor to work alongside @Fwiz @sandeepnailwal and the rest of the big brained Polygon team This is a tough time for many web3 companies but we’ll pull through Polygon is inevitable https://t.co/V7k2hnggmM– Ninjasurprise.eth Polygon Labs (@Ninjasurprise_) February 21, 2023
Nailwal stated that after last year’s funding round, zero-knowledge rollups would be the “endgame”, for scaling solutions such as Polygon. Since then, the firm has invested in zk technology and Polygon Hermez (a privacy-focused rollup) and Polygon Zero.
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BeInCrypto reached out to the company or individual involved in this story to obtain an official statement on the latest developments. However, it has not heard back.
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