In addition to the layoffs, Dapper Labs finds itself entangled in a legal battle.
The crypto industry has seen a wave of job cuts as companies grapple with a challenging market environment. Dapper Labs Inc, a prominent non-fungible token (NFT) focused company, is the latest to announce a round of layoffs as the NFT market continues to struggle. The new downsizing comes after the company had already reduced its workforce by 20% in February and 22% in November of last year. The job cuts, which mark the third set of layoffs conducted by the firm, will see 51 employees, representing around 20% of the workforce, leaving the company, according to Growjo.com.
In a Twitter announcement on July 13, Dapper Labs CEO Roham Gharegozlou confirmed the departure of “51 brilliant colleagues and friends” from different positions at the NFT firm. The Dapper Labs boss cited the ongoing market conditions and a lack of appetite for digital artwork as contributing factors to the latest downsizing. The decision to reduce staff was undoubtedly challenging, but Gharegozlou emphasized its necessity to ensure the company’s viability.
We said goodbye to 51 brilliant colleagues and friends today @dapperlabs – this is the note I sent our team.
We remain fully dedicated to our core communities and committed to building amazing products that push the world forward together.
If you’re looking to hire some of the… pic.twitter.com/xwhjZAYLN8
— roham (@roham) July 13, 2023
In a separate letter addressed to employees, Gharegozlou explained that the job cuts impacted both full-time workers and C1 contractors. He acknowledged the difficulty of the situation yet reiterated that streamlining the business was essential to operate more efficiently.
“With this restructure we have made the business more lean, which is going to let us do the right thing for our fans and grow our communities in the most healthy ways possible.”
Dapper Labs Layoffs
Despite the workforce reductions, Gharegozlou reassured stakeholders that Dapper Labs and its associated platform, Flow, remained financially robust. He stated that the restructuring efforts would enable the company to prioritize its fans and foster healthy community growth.
The NFT company is the brains behind the creation of popular NFT collections such as CryptoKitties and NBA Top Shot. However, the NFT sector has faced significant challenges in recent times. Sellers currently dominate the market, leading to an imbalance in NFT trading. Many prominent NFT collections have experienced substantial declines in their floor prices.
Industry observers, including sports and NFT commentator Clegainz, acknowledged that the layoffs were not entirely surprising given the prevailing conditions in the Web3 industry and the wider macroeconomic landscape. Clegainz also noted that Dapper Labs was not alone, as other Web3 companies faced similar hardships.
The crypto industry has witnessed ongoing layoffs despite market recovery this year. In February, blockchain research and analysis firm Massari let go of 15% of its workforce, citing challenging market headwinds. Likewise, in January, Crypto.com, a virtual asset service provider (VASP), announced a 20% reduction in staff, while stablecoin issuer Circle saw a 25% increase in its workforce.
Dapper Labs Entangled in a Legal Battle About Its NBA NFTs
In addition to the layoffs, Dapper Labs finds itself entangled in a legal battle. The United States District Court Judge, Victor Marrero, denied the company’s request to dismiss a lawsuit related to the NBA’s Top Shot NFT collection.
Judge Marrero claimed that the NFTs offered by Dapper Labs might fall under the definition of securities, partly agreeing with the plaintiffs that the digital artworks sold on the Dapper Labs platform could be classified as security.
Responding to the judge’s decision, the company spokesperson stated that the denial did not mean the plaintiffs were right or the final ruling to the case.
“Importantly, today’s order only denied the defendant’s motion to dismiss the complaint. It did not conclude the plaintiffs were right, and it is not a final ruling on the case’s merits,” the spokesperson said.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
Source: https://www.coinspeaker.com/dapper-labs-layoffs-nft/