Polygon Labs Announces Plans to Spin Off ID Division; Layoffs Underway

Polygon Labs on Thursday announced that it was going to spin off its Polygon ID division to focus on “core protocol development work”. The developer also said that it will lay off around 19% of its workforce in an attempt to enhance performance.

Polygon Labs to spinoff identity division

Marc Boiron, CEO of Polygon Labs in a blog post said the software solutions company was planning to spin off its Polygon Identity division. According to the post the spin-off has spurred from the firm’s strategy of focusing the Polygon Labs team on core protocol development work. The spin-off comes after the Ethereum-focused developer had previously decided to let go of its Polygon Ventures team at the end of last year

Layoffs reach the Web3 community

Polygon Labs also announced its decision to cut roughly 19% of jobs. The layoffs are likely to impact 60 teammates and mark the second set of staff reductions for the firm.

Additionally, the company clarified that the reduction in workforce was not due to financial reasons but to enhance performance. For impacted team members, the firm will be offering 2 months of severance, it added. Polygon Labs last year declared that it was cutting 20% of its workforce due to its restructuring plans.

The layoffs resonate with market conditions as other financial giants and crypto-based companies have also reduced their workforce due to a financial crunch or to better organize.

Dented investor sentiments weigh financial markets

Global cryptocurrency marketplaces experienced layoffs and delayed salaries in the previous year. Organizations struggled in 2023 due to pressure on financial resources brought on by high-interest rates and a lack of investor enthusiasm. But the beginning of 2024 hasn’t been any better either. widespread job cuts that began in 2023 have continued into 2024.

Earlier today, Deutsche Bank declared that it would be laying off 3,500 employees to save expenses. Previously, financial behemoth Citi had also declared that they would be laying off about 20,000 employees in a similar vein. Singing the same cords, Blackrock had also decided to lay off around 3% of its workforce.

With piling uncertainties, the prices for Polygon (MATIC) were largely rangebound. At the time of writing, it has risen 0.5% in the last 24 hours,  hitting the $0.8071 level. Trading volumes for Polygon (MATIC) have fallen nearly 30% as compared to the previous day, currently standing at $324.7 million.