Dapper Labs, the non-fungible token (NFT) collectibles company behind NBA Top Shot, recently bid farewell to an additional 51 employees, following a previous staff reduction of 20% in February earlier this year.
In an announcement by Roham Gharegozlou on July 13, the company’s CEO revealed that the organization is undergoing its third round of staff layoffs within a year.
Gharegozlou utilized Twitter to share an email sent to team members, disclosing that a significant number of 51 employees will depart.
“The decision was incredibly difficult because of the amazing people affected, but it is necessary, and the right thing to do is to ensure a lean and efficient Dapper Labs,” reads the CEO’s note.
Gharegozlou emphasized that Dapper Labs and Flow, NBA Top Shot’s Blockchain, had ample capital resources, stating, “Despite the restructure, our financial position remains strong.”
Furthermore, he expressed, “Through this reorganization, we have streamlined our operations, enabling us to prioritize the well-being of our fans and foster the organic growth of our communities in the most sustainable manner.”
NFT Market Slump: Dapper Labs’ Journey from Prominence to Challenging Times
Dapper Labs, a Vancouver-based company, rose to prominence in 2017 with the launch of CryptoKitties, a blockchain-based “game” that introduced the concept of NFTs through collectible feline characters.
Another noteworthy venture by Dapper Labs is NBA Top Shot, a collaboration with the NBA that debuted in 2020. Powered by Dapper Labs’ Flow blockchain, NBA Top Shot allows users to trade digital assets based on video clips from NBA games.
In March 2021, Dapper Labs achieved a significant milestone by securing $305 million in funding, driving its post-money valuation to an impressive $2.6 billion.
However, this accomplishment coincided with the broader decline witnessed by the NFT market and trading in 2022.
Reports in April highlighted the prevalence of sellers, resulting in an imbalance in the NFT market.
Moreover, numerous renowned blue-chip collections have experienced substantial drops in their floor prices in recent months.
Regrettably, the subsequent crypto winter took its toll on Dapper Labs.
The company had to implement workforce reductions, laying off 22% of its employees in November 2022, followed by an additional 20% reduction in February of the following year.
According to data from Growjo.com, the most recent layoff accounted for approximately 12% of the company’s total staff.
NFT Winter: Downturn in the NFT Industry as Sales Plummet
According to a report from IntoTheBlock, the NFT industry is currently facing a significant downturn.
The weekly sales count is predicted to be at its lowest point since June 2021, with an average daily count of 11.65k over the past week.
This represents a substantial decrease from the peak levels observed during the 2021–22 bull market.
The decline in NFT sales has had a severe impact on trading volumes.
After reaching its yearly highs in March, the downward trend continued and accelerated throughout the second quarter. The average daily trading volume over the past week was approximately $16 million.
Comparatively, on a year-to-date basis, the total volume of NFTs has only increased by 11%, while the total cryptocurrency market cap has grown by 48% during the same period, according to CoinMarketCap.
This indicates that the NFT sector has become detached from the overall growth observed in the digital asset market.
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