Pump.fun Faces Backlash Over Mass Layoffs Before Token Vesting

Investigation reveals Pump.fun laid off 40+ staff just before $86.5M in PUMP tokens vested, despite the protocol earning $1M in daily revenue.

New revelations show that Pump.fun continues to generate approximately $1 million in daily revenue, even as former employees allege that a wave of layoffs occurred immediately before their PUMP tokens were scheduled to begin vesting.

An investigation by Sandmark claims that the company, operated by Baton Corporation Ltd, dismissed over 40 employees across two separate phases—the first in late March and early April, followed by a second wave in July. According to leaked documents, many of those affected had signed compensation agreements in June 2025 involving PUMP tokens. These contracts included a one-year cliff, after which 25% of the allocated tokens were set to unlock.

Layoffs timed with key PUMP vesting milestones

A portion of the workforce was released just before this cliff expired, resulting in the automatic forfeiture of their unvested tokens. Data from Sandmark indicates that at least one former staff member lost out on compensation valued at over $1 million.

This situation developed alongside the start of a multi-year token unlock schedule for the team and early investors. On-chain data reveals that roughly 57.3 billion PUMP tokens, valued at approximately $86.5 million, were distributed to 121 wallets linked to insiders and investors. These corporate decisions have faced intense public scrutiny as the layoffs coincided with the beginning of token distributions to remaining participants.

Management cites restructuring as community reacts

Leaked recordings from an internal meeting show co-founder Noah Tweedale defending the decision, arguing the company had “grown too fast” and could no longer maintain the aggressive approach of its early stages. Tweedale stated that Pump.fun needs to transition into a more structured organization, which necessitated the team restructuring.

Former employees further claim that severance packages were limited to just one week of pay for every month worked. As of now, management has not released an official public statement regarding the allegations.

The incident has triggered a sharp backlash within the Solana community. An anonymous group claiming to represent more than 40 former employees has begun sharing internal documents, termination emails, and details of the token incentive program across social media platforms.

This scandal is unfolding while Pump.fun remains one of the most profitable crypto platforms in terms of revenue generation. Despite internal friction and reputational risks, the protocol still records roughly $1 million in daily earnings, highlighting a stark contrast between its financial success and the growing dissatisfaction among former staff.

These disclosures are likely to increase scrutiny on how crypto firms structure token-based compensation, particularly when layoffs align with critical vesting dates. For investors, this raises questions about corporate governance and the potential market pressure as the multi-billion PUMP token unlock continues over the coming years.