The NFT sector has cooled down significantly this year amid the crypto winter, and Dapper Labs, the firm behind Cryptokitties and NBA Top Shot, is feeling the pinch.
On July 13, Dapper Labs CEO Roham Gharegozlou announced the company had let go of 51 employees, representing around 12% of its total workforce.
According to Gharegozlou, the layoffs affect both full-time and contract staff. He described the decision to cut jobs as “difficult” but “necessary and right to ensure a lean and efficient company.”
This is the second round of layoffs at Dapper Labs this year. In February, the firm cut around 20% of its workforce, citing “macroeconomic conditions.” And in November 2021, Dapper Labs cut 22% of staff for similar reasons.
Gharegozlou said in November 2021 that the cuts were needed for the “long-term health” of Dapper Labs’ business and communities.
The job cuts highlight how the downturn in the crypto and NFT markets has impacted businesses that relied heavily on the hype around these assets during the 2021 bull run. Crypto and NFT prices have fallen sharply in 2022, dampening retail demand.
Clegainz, a sports and NFT analyst, said the layoffs at Dapper Labs were “not a huge surprise,” given the current climate in the Web3 space and the wider macroeconomic environment. However, Dapper Labs is not alone, with many other Web3 companies facing similar challenges.
In summary, Dapper Labs’ recent round of job cuts signals the tough market conditions currently facing the NFT sector. As demand for NFTs cools, companies are being forced to downsize in order to survive the crypto winter. The layoffs show that even industry leaders like Dapper Labs are feeling the pinch amid lower NFT prices and sales.
This article is based on the original news published on TheCoinRise.