Polygon Labs, the Ethereum scaling platform, has cut around 100 jobs, or 20% of its workforce, the firm said on Tuesday.
The job cuts come at a time when the crypto industry is reeling from the impact of the FTX crypto exchange implosion and subsequent downturn.
"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," the company said in a release.
The cuts affect employees mostly in the U.S., Canada and India where most of Polygon's workforce is located, a company spokesperson told CoinDesk.
"Momentarily, your access to Polygon Labs' systems, including Slack and email will end; the abrupt nature is a necessary security measure," read an email to a laid-off employee viewed by CoinDesk.
The native token of Polygon MATIC was down over 5% on the day at $1.42.
Company co-founder Sandeep Nailwal tweeted to say that he would be joining the company's weekly Community call on Discord on Wednesday to "address any doubts any community members might have."
"The treasury remains healthy, with a balance of more than $250 million and more than 1.9 billion MATIC, and we have crystallized our strategy for the next several years to help drive mass adoption of Web3 by scaling Ethereum," Nailwal said.
While Nailwal has included the phrase "Top 3 by impact" in his Twitter profile – an apparent comparison with Binance and Ethereum – the complete picture of how the 2022 crypto contagion impacted Polygon remains unclear.
The collapse of FTX, in part, had seen users move funds resulting in wild swings in daily transactions on Polygon during the fourth quarter. There was also a tremendous addition of daily addresses on Polygon at the time, partly due to the launch of its zero-knowledge EVM (zkEVM) public testnet. The zkEVM beta main network is set to go live on March 27, per a recent announcement.
In Jan. 2022, Nailwal announced he would be returning $100 million USDC that Ethereum co-founder Vitalik Buterin had previously sent to Nailwal's initiative for Indian COVID-19 relief efforts. Buterin would be able to use the funds in a more accelerated way, said Nailwal, because he – as a nonresident Indian citizen – had to be extra cautious to be in full compliance with Indian jurisdiction.
UPDATE (Feb 21 14:40 UTC): Adds additional reporting and context throughout.
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