Key Points:
Paxos workforce cut takes place with a 20% reduction, affecting about 65 employees, to better focus on opportunities in tokenization and stablecoins.
Despite the layoffs, Paxos remains financially strong, with over $500 million on its balance sheet and continues to issue stablecoins.
Stablecoin issuer Paxos has laid off approximately 20% of its workforce, affecting around 65 employees, according to Bloomberg.
Paxos Workforce Cut: 20% Off Amid Strategic Shift
Paxos workforce cut was initially reported by The Block and comes despite Paxos holding over $500 million on its balance sheet, as per Chief Executive Officer Charles Cascarilla's email to staff.
In the email, Cascarilla emphasized Paxos’s strong financial position, asserting that the company is well-positioned for future success. The impacted employees have been offered 13 weeks of severance pay, three months of subsidized health insurance, three months of outplacement support, and a two-year extension to exercise vested options. Additional benefits include second-quarter bonuses for those on incentive programs and specific support for those on approved parental or medical leave.
Following these layoffs, Paxos's headcount is estimated to be between 200 and 300 employees, according to sources. The company, valued at $2.4 billion during its $300 million Series D funding round in 2021, is now strategically realigning its focus.
Strategic Plans for the Future
Cascarilla described the day as tough and took responsibility for the Paxos workforce cut, stating that the reduction enables Paxos to better seize opportunities in tokenization and stablecoins. He acknowledged that while the adoption of stablecoins is expected to grow, launching and scaling new regulated tokens is a time-intensive process.
Paxos's financial infrastructure previously supported a Binance-branded stablecoin, which was phased out last year due to regulatory pressure, significantly impacting Paxos’s revenue. Currently, Paxos issues several stablecoins, including the PayPal USD (PYUSD) and the recently launched Lift Dollar (USDL), which is issued in the United Arab Emirates. PYUSD was extended to the Solana blockchain in May.
Looking forward, Paxos plans to discontinue its settlement services in commodities and securities to concentrate on the tokenization of assets and the development of regulated stablecoins.
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