- Staff at Parity directed to attend company retreat after being laid off.
- Employees tell DL News company executives paid themselves rich salaries.
- Parity spokesperson called the situation a “challenging step” for the company.
A week before Parity Technologies’ annual retreat to the Mediterranean island of Mallorca, its 385 employees received some shocking news: The company was laying most of them off.
But with flights already booked, the soon-to-be discharged workers were still expected to attend a retreat at the Iberostar Cala Domingos beach resort from October 9 to 13, several employees told DL News.
A representative from Parity told DL News the company made the event opt-in after announcing the layoffs.
What was originally planned as a fun week of presentations, workshops, and parties morphed into a discussion of the dissolution of Parity, who would survive the cull, and what comes next.
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“It was a surreal, sick joke,” said one Parity employee, in a text, who attended the retreat. “Kinda Hunger Games vibes.”
Parity Technologies is a blockchain infrastructure company tasked with developing the Polkadot blockchain.
According to several current and former employees, Polkadot and Parity are now racked with inner strife as funding dwindles and employees decry the juicy salaries top managers are paying themselves.
“The executives were being paid a lot and there were not many tangible results delivered,” Eric Wang, Parity’s former head of strategic growth projects who left the company in January, told DL News. “Parity became pretty broken.”
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The situation is a dramatic turn for one of the most vaunted projects in DeFi.
In 2020, Polkadot went live with a stellar pedigree and a lot of promise. Gavin Wood, a co-founder of Ethereum, started Polkadot to address the limitations of the blockchain he helped to create, such as its struggle to scale.
Over the next three years, talented devs and DeFi devotees flocked to Polkadot, which became a perennial top 10 performer in crypto with a $54 billion market capitalisation at its peak in November 2021.
In response to DL News’ request for comment, Parity did not deny or confirm the layoffs, nor did it address the issue of management salaries.
Parity said it looks forward to the “continued emergence” of participants in its network and the further adoption of the Polkadot blockchain. A spokesperson said the firm was committed to decentralising Polkadot’s development, and called the situation a “challenging step” for the company.
“We are grateful to our teams which have been instrumental in getting us to where we are today,” a Parity spokesperson said in an emailed statement to DL News. “While this is a challenging step for Parity, it is a necessary one for Polkadot.”
Given Parity’s push to grow Polkadot’s user base, employees felt blindsided by the layoffs, they told DL News on condition of anonymity to protect their identities at such a sensitive moment.
Only the company’s core engineering, developer relations, ecosystem success, and Asia teams were spared from being let go, the employees said.
Retreat in Spain
These issues were all supposed to be unpacked at the retreat in Spain. But it was hard for team members to set aside the stress of the situation.
“It was spun as if they would have a voice in the decentralisation plans,” one employee who attended said. “Some people cried, even on stage giving presentations. Many left early.”
According to multiple employees at the retreat, Wood did not attend, leaving many angry and confused. The Polkadot and Parity founder was also absent from the all-hands meeting where employees were informed of the looming layoffs, according to employees.
Employees who spoke with DL News said they believe the decision originated with Wood.
“Many employees feel he does not have his priorities straight and doesn’t assist with promoting Polkadot,” said one employee.
Wood did not respond to a request for comment from DL News.
Lagging behind rivals
Employees also said that Fahmi Syed, Parity’s chief financial officer, left the company the day before the layoffs were announced. Syed’s LinkedIn profile shows he is still CFO at the firm.
Syed declined to respond to DL News’ request for comment.
Wood set up Parity Technologies to help commercialise the Polkadot network. It plays a similar role to IOHK, the commercial venture that develops the Cardano blockchain.
But Polkadot has lagged behind its competitors. Polkadot’s DOT cryptocurrency has skidded about 18% this year compared to a 32% jump in Ether.
Parity is partly funded by the Web3 Foundation, another organisation set up by Wood. According to one Parity employee, the Web3 Foundation has also announced layoffs affecting about 40% of employees.
Based in Zug, Switzerland, the group has between 100 to 200 workers, according to SignalHire, a jobs site.
‘Company spends money like it’s still in a bull market’
On October 10, Parity said in a post on its official X account, that it was “sunsetting its go-to-market functions” to decentralise development of the Polkadot ecosystem.
Parity did not publicly acknowledge the layoffs, but an employee at Parity’s press office told DL News shortly after the X post that the company would “experience staffing changes in the coming months.”
According to Parity employees, the company laid off staff because it was running out of cash. They said that Parity’s aggressive hiring spree over the past 12 months had contributed to its financial woes.
One employee said the company’s leadership should have done a better job of managing its costs in a bear market. “[The] company spends money like it’s still in a bull market,” the employee said.
Others blamed excessive salaries paid to executives as contributing to the layoffs, saying top executives typically received north of $1 million in cash.
“At one point a vice president of digital marketing accidentally emailed his salary to the whole company showing he made around $700,000,” said one employee.
‘Decentralisation sounds great, but when there is no unified strategy in place, or no one is accountable, no one knows what will happen.’
— Parity employee
On the ground, employees are worried about what will happen to the Polkadot ecosystem, which some have been labouring on for seven years.
One person said that the biggest fear among employees is that without Parity as a guiding force, talent will flee from the Polkadot ecosystem.
“Decentralisation sounds great, but when there is no unified strategy in place, or no one is accountable, no one knows what will happen,” the employee said.
Wang, on the other hand, said he thought the layoffs could be positive in the long run. “Getting rid of all these employees and decentralising can only be a good thing, since the bar is set so low,” he said.
Others involved in the Polkadot ecosystem appear to have checked out entirely.
According to the same person, the Web3 Foundation was supposed to attend the Parity retreat, but cancelled their flights after the layoffs. “No one attended,” the employee said.
And there’s been no timeline for the job cuts, so Parity employees remain in limbo. But more than everything else, employees still have no explanation for the abysmal timing of Parity’s mass layoffs.
“Why fire everyone right before the retreat?” said one employee. “Just a dumpster fire.”
Correction: This article has been updated to clarify that Parity Technologies made its company retreat opt-in after announcing the layoffs.
Update: Added a comment from Eric Wang on the benefits of Parity’s layoffs.
Tim Craig is DL News’ Edinburgh-based DeFi correspondent. Reach out to him with tips at firstname.lastname@example.org. Inbar Preiss is DL News’ Brussels-based regulation correspondent. Contact her at email@example.com.