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Stablecoin issuing company Paxos has laid off 20% of its workforce, decreasing its employee count by 65 individuals, Bloomberg reported Thursday, citing an internal email.
According to the report, Paxos’ chief executive officer and co-founder Charles Cascarilla said the reduction in headcount would allow the company to capitalize on future opportunities in the tokenization and stablecoin sectors. Paxos intends to phase out some of its services to focus on tokenization and stablecoins.
Paxos Sacks 65 Employees
The stablecoin issuer offered the affected individuals three months of subsidized health insurance and outplacement support, 13 weeks of severance pay, and a two-year extension to exercise vested options. In addition to the separation offer, employees on a quarterly incentive program will receive second-quarter bonuses, while people with approved parental or medical leave will receive certain payments and benefits.
Due to the job cuts, Paxos’ headcount now hovers between 200 and 300.
Interestingly, Cascarilla said Paxos is in a solid financial position, with more than $500 million on its balance sheet. This raises the question as to why the company’s headcount was reduced.
“This is a tough day. I take responsibility for this decision and regret having to take this course…We communicated this news to all 65 impacted team members directly. This allows us to best execute on the massive opportunity ahead in tokenization and stablecoins. With more than $500 million on the balance sheet, we are in a very strong financial position to succeed,” Cascarilla stated.
Paxos Unveils Yield-Bearing Stablecoin
Paxos’ employee layoffs come a week after crypto payments infrastructure company MoonPay let go of 10% of its workers due to overinvestments resulting in below-expected operating margins and a high-cost structure. The firm said the role eliminations and relocations would improve its cost structure and strengthen its foundation.
Like Paxos, MoonPay said it is in a financially strong position with positive cash flow and years of runway ahead. The affected employees will also receive separation packages and continue to have an opportunity to be MoonPay shareholders.
Meanwhile, Paxos’ United Arab Emirates arm recently launched a new yield-bearing stablecoin, the Lift Dollar (USDL). USDL is designed to pay daily the yield generated from its reserves to eligible wallet addresses.