Paxos Reportedly Downsizes Workforce by 20%: Details

Stablecoin issuer Paxos has laid off 20% of its workforce, cutting its headcount by 65 people, Bloomberg reported Thursday, citing an internal email.

According to the a reportCharles Cascarella, CEO and co-founder of Paxos, said the headcount reduction will 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 fired 65 employees

The stablecoin issuer provided affected individuals with 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 participating in the quarterly incentive program will receive second-quarter bonuses, while those with approved parental or medical leave will receive certain payments and benefits.

Due to job cuts, the number of Paxos employees is now between 200 and 300.

Interestingly, Cascarilla said Paxos is in a strong financial position, with more than $500 million on its balance sheet. This raises the question of why the company's employee numbers were reduced.

“This is a difficult day. I take responsibility for this decision and regret having to take this course… We have communicated this news to all 65 affected team members directly. This allows us to better capitalize on the massive opportunity ahead in the tokenization and stablecoin space. “With over $500 million on the balance sheet, we are in a very strong financial position to succeed,” Cascarella said.

Paxos unveils a yield-paying stablecoin

The Paxos layoffs come a week after cryptocurrency payments infrastructure company MoonPay leave it 10% of its employees due to overinvestment resulting in lower than expected operating margins and a high cost structure. The company said the removals and relocation would improve its cost structure and strengthen its bottom line.

Like Paxos, MoonPay said it is in a strong financial position with positive cash flow and years of runway ahead. Affected employees will also receive separation packages and will continue to have the opportunity to be shareholders of MoonPay.

Meanwhile, the UAE arm of Paxos recently Launched A new yield-bearing stablecoin, Dollar Lift (USDL). USDL is designed to pay the yield generated from its reserves daily to eligible wallet addresses.