The Block reports that stablecoin issuer Paxos revealed in an email sent to internal employees yesterday (12) that it will be conducting layoffs of up to 20% of its workforce. At the same time, payment provider MoonPay also announced layoffs of 10% last week. Both are crypto companies that have recently claimed to be in good financial condition but still need to downsize.
The undisclosed email indicated that Paxos has reduced its staff by 65 employees, approximately 20% of the total workforce, which currently ranges from 200 to 300 employees. Paxos co-founder and CEO Charles ‘Chad’ Cascarilla stated, “We are laying off 20% of our workforce to better position Paxos to seize the significant opportunities in tokenized real-world assets (RWA) and stablecoins. With assets on our balance sheet exceeding $500 million, we are in a solid financial position to succeed.”
He emphasized that the company will prioritize its core products and lower the priority of other ancillary products, stating that stablecoins are expected to grow more than tenfold in the coming years and become a cornerstone of tokenized financial systems, requiring more time and cost to launch and expand new regulated tokens.
It was also reported by Bloomberg that Paxos plans to reduce its securities settlement services. On the other hand, MoonPay, as a startup payment provider actively involved in the Web3 space, announced layoffs of 10% last week due to increased operating costs and lower-than-expected profits.
MoonPay CEO Ivan Soto-Wright wrote in a letter, “We are implementing a series of layoffs and structural adjustments that will affect approximately 10% of our workforce.” According to LinkedIn data, around 30 people are affected by these layoffs.
Soto-Wright admitted that overinvestment in certain areas and regions has increased operating costs and stated, “As CEO, it is my responsibility to address this issue, as not doing so would be irresponsible to our team and shareholders.”
As a favored partner of crypto payment companies, Paxos currently offers various stablecoin products, including the approximately $400 million PayPal USD (PYUSD), $430 million Pax Gold (PAXG), and $145 million Pax Dollar (USDP). A few days ago, the company launched the Ethereum-based Lift Dollar (USDL), a yield-generating stablecoin where the reserve yield is automatically distributed to wallets daily.
On the other hand, MoonPay announced last month the launch of a Web3 tools platform to help large brands like Adidas, Gucci, and Puma create communities, manage loyalty, and generate new revenue sources. MoonPay will also be opening PayPal payment functionality in the EU and the UK, allowing local users to purchase cryptocurrencies on the platform using their PayPal accounts.