Web3 firm Yuga Labs has announced a restructuring of its operations to focus on the metaverse amid dwindling metrics across its verticals.
Through a blog post, Company CEO Daniel Alegre disclosed the firm’s new direction to ensure efficiency. Going forward, it appears that Yuga Labs will be throwing its weight behind Otherside, a gamified metaverse extension to its digital collectible project Bored Ape Yacht Club (BAYC).
A fallout from the restructuring effort could see Yuga Labs rein in a number of projects that do not align with its core values of Web3 storytelling. Alegre confirmed that the restructuring will lead to significant job cuts in the company but the extent of the layoffs remains unclear.
“After a recent period of thoughtful consideration, I have decided that we need to restructure the Yuga Labs teams,” said Alegre. “The implication of these changes is that a number of roles have been eliminated across the company, impacting some of your colleagues.”
Alegre clarified that the layoffs will only affect the company’s U.S.-based staff but will be paying attention to the composition of international teams. Greg Solano, Yuga Labs co-founder revealed via X (formerly Twitter) that despite the layoffs, the company’s staff strength stands at over 120.
While juggling multiple projects at once is a worthy objective, both Solano and Alegre concede that the firm has been underperforming in its short-term goals, prompting the need for a reshuffling. Yuga Labs’ attempts at gaming hit several roadblocks which Alegre blames on the absence of a proper in-house team to lead advances.
“I realized very quickly that there were a number of projects that, while well-intentioned, either spread the team too thin or required execution expertise beyond our core competencies,” said Alegre.
Learning from its mistakes, Yuga Labs is putting its house in order ahead of the release of its metaverse offering to go “all-in on our Otherside strategy.”
A cross-section of pundits have blamed Yuga Labs’ restructuring on dwindling revenues in the face of an extended bear market. The floor prices for its BAYC digital collectibles stand at around $42,500 compared to $83,400 at the start of the year.
A wave of legal trouble
Yuga Labs has been hit with a barrage of legal and regulatory trouble, putting the firm in uncertain terrain. A class action lawsuit by aggrieved investors alleging fraud marked the start of the company’s legal troubles that was followed by a trademark squabble at the start of 2023.
The U.S. Securities and Exchange Commission (SEC) announced that it had opened investigations against Yuga Labs over a potential infringement of capital market laws. At the time, the company maintained its innocence, stating that its activities did not amount to selling unregistered securities within the interpretation of the Howey test.
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