Last week, Polygon announced they’d reduced the team by 20 percent, laying off approximately 100 people. It’s the latest in a growing list of crypto announcements that hint at a broader correction taking place as the industry adapts to new market conditions. 

Layoffs are occurring across the protocols, exchanges and companies that make up the crypto ecosystem. Coinbase, Messari, Magic Eden, Genesis and Chainalysis are among the firms that have made sweeping layoffs, many citing “restructuring” and “a major downturn.” When consumers don’t buy crypto, it has flow-on effects. The layoffs have exceeded 2,000 this year, according to Bloomberg News.

“Many businesses that were founded or grew up during the 2017-2021 bull-run hired more staff than was necessary. Hiring at Polygon did stop this past fall,” said Tyler Sellhorn, former business operations manager at Polygon Labs. Sellhorn finished up at Polygon in February. 

The layoffs affected all teams across Polygon, but operations and marketing were the most affected. 

“Polygon Labs isn’t going to slow down. By narrowing their focus on core technologies, such as the zk-EVM launch on March 27, Polygon is poised to win this phase, especially considering the relationships they’ve initiated with non-crypto native brands,” Sellhorn added. 

In 2022, Polygon onboarded some of the world’s largest brands including Starbucks, Instagram and Reddit. 

Anhelina Stanolievich, the former Ecosystem Marketing Manager at Polygon, was part of the team responsible for supporting and developing these ecosystem projects. She was let go last week. 

“While our marketing budgets had been reduced at the beginning of the year, the news of the layoff came as a shock to everyone,” Stanolievich said. “Polygon went through company restructuring multiple times since I joined, but it had never caused massive layoffs until now.”

The current situation has been compared to what happened with startups in the aftermath of the 2017 initial coin offering boom. 

“Companies with no long-term utility inevitably get wiped out,” said Tracy Wong, a former employee of Zepeto, Asia’s largest metaverse platform. Wong was part of the mass layoffs of Zepeto’s U.S. team in February.  

“We were told they’re dissolving the U.S. team to centralize operations,” Wong said. “I remain optimistic about the technology, and I believe in anything with utility.” 

Although a great shrinkage is undoubtedly occurring, the resilience of the technology is evident. A recent Pantera Capital report shows Bitcoin losses at the beginning of the year were less than those of Tesla at 62 percent, Meta at 60 percent and PayPal at 57 percent. The year-over-year loss for Bitcoin, which Pantera uses as a proxy for the wider blockchain space, was 54 percent.

While the collective sentiment is that everyone’s hunkering down to survive in a market that might not recover until late 2024, the shared spirit of crypto remains unwavering.