Photo credit: Paxos/X

Stablecoin issuer Paxos has reduced its workforce by about 20%, or 65 employees, several news outlets reported, including The Block.

The publication, which first reported the job cuts on June 12, said that Paxos co-founder Charles Cascarilla wrote an email to employees, informing them of the decision to lay off some staff despite being in a solid financial position.

“We shared a difficult decision to reduce our employee headcount by ~20%. We communicated this news to all 65 impacted team members directly,” Cascarilla, who also serves as the firm’s chief executive, reportedly wrote in the email.

“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,” he added.

Cascarilla stated in the email that Paxos has provided impacted employees with a comprehensive severance package, including 13 weeks of severance pay, three months of subsidized health insurance coverage, three months of outplacement assistance, and a two-year extension to exercise vested options.

Additionally, affected employees who were part of a quarterly incentive program will receive their second-quarter bonuses, and those with approved parental or medical leave will receive payments and benefits in addition to the severance package.

Paxos’ headcount now stands between 200-300, according to The Block’s source.

In 2001, Paxos raised $300 million in a Series D funding round, valuing it at $2.4 billion at the time. It also has a balance sheet of around $500 million, according to disclosures from its various stablecoins, namely PayPal USD (PYUSD) and USDP stablecoins.

Focus on asset tokenization and stablecoins

The layoffs come almost a year after PayPal introduced the PYUSD, developed in partnership with Paxos Trust. This new digital asset, designed for use in digital payments and the Web3 ecosystem, maintains a 1:1 peg to the United States dollar and is backed by a combination of US dollar deposits, short-term US Treasury bonds, and equivalent cash reserves.

However, the new stablecoin saw a significant circulation drop in March, with the stablecoin issuer reporting a 39% decline compared to the previous month’s figures to $188.5 million.

Bloomberg reported that Paxos intends to gradually discontinue its settlement services in commodities and securities to focus more on asset tokenization and stablecoins.