Polygon Labs Reveals Intentions to Separate ID Division; Workforce Reductions in Progress

Polygon Labs Reveals Intentions to Separate ID Division; Workforce Reductions in Progress

Polygon Labs to Spinoff Identity Division

Polygon Labs revealed its decision to spin off the Polygon Identity (ID) division, focusing on core protocol development work. This strategic move follows the company’s previous decision to disband its Polygon Ventures team at the end of the previous year.

Layoffs in Progress

In a blog post, Marc Boiron, CEO of Polygon Labs, announced a significant workforce reduction, affecting approximately 19% of the company’s employees. This marks the second set of layoffs, with around 60 team members impacted. Polygon Labs clarified that the decision is not financially motivated but aims to enhance overall performance. Affected employees will receive two months of severance, aligning with the company’s restructuring plans from the previous year.

Market Conditions and Workforce Reductions

The layoffs at Polygon Labs reflect broader trends in the Web3 community, where financial constraints or organizational improvements have led several companies to reduce their workforce. The global cryptocurrency market, facing challenges such as delayed salaries and layoffs, continues to navigate uncertainties. In 2023, organizations struggled due to financial pressures from high-interest rates and a lack of investor enthusiasm, a trend that has persisted into 2024.

Industry-Wide Impact

Notably, Deutsche Bank, Citi, and Blackrock have also announced workforce reductions, contributing to the industry-wide job cuts. Deutsche Bank declared a plan to lay off 3,500 employees to control expenses, while Citi opted for a significant reduction of around 20,000 employees. Similarly, Blackrock decided to cut around 3% of its workforce.

Market Impact on Polygon (MATIC)

In the midst of these uncertainties, Polygon (MATIC) prices have remained largely rangebound. As of the latest update, MATIC has experienced a modest 0.5% increase in the last 24 hours, reaching the $0.8071 level. Trading volumes for Polygon (MATIC) have declined by nearly 30% compared to the previous day, currently standing at $324.7 million.

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