Dapper Labs, the company behind the popular NFT collection NBA Top Shots, has laid off 20% of its staff just three months after announcing its first round of layoffs.
Like many other NFT projects, Dapper has been hard hit by the bear market, with NFT trading volume dropping 97% from its January 2022 peak. In November, it announced it was laying off 22% of its staff, describing the move as “necessary to get us in fighting shape for the path ahead.”
The project has laid off another 20% of its full-time staff. CEO Roham Gharegozlou confirmed the layoffs in a recent email to investors. He pointed out that under the current market conditions, the company must restructure to survive.
“As part of this restructure, we have made the difficult decision to part ways with team members representing 20% of full-time employees,” Roham said.
The CEO, however, clarified that the company is in a strong cash position with no outstanding debt.
Dapper Labs has been one of the biggest players in the NFT industry. The Canadian company burst onto the scene as the creator of CryptoKitties, one of the earliest NFT collections to receive widespread interest. While Ethereum hampered the growth of the collection (it famously clogged the entire Ethereum network almost to a halt), Dapper Labs kept building and found even greater success with NBA Top Shot Moments.
The investors piled up to back the company’s success, and in a September 2021 funding round, it received $250 million at a $7.6 billion valuation. Investors included GV, Google’s (NASDAQ: GOOGL) venture capital arm, and a16z.
The NFT market has plummeted since then. Others NFT giants like OpenSea have had to lay off their staff, and the smaller players like Magic Eden haven’t been spared either.
For Dapper Labs, a recent ruling in which a class-action lawsuit against it was upheld in New York could deal it a fresh blow. Investors alleged that Dapper was selling securities in NBA Top Shot Moments, and Judge Victor Marrero believes they have a case.
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