Leading non-fungible token (NFT) market OpenSea has cut 20% of its workforce due to the ongoing economic slump, joining a long list of companies that have laid off employees in order to stay afloat.
This was due to “an unprecedented combination of crypto winter and broad macroeconomic instability,” according to OpenSea CEO and co-founder Devin Finzer, in an internal memo.
To prepare for a prolonged bear market, Finzer stated that the layoff was part of the company’s strategy. At least five years of unstable market conditions are expected, according to the CEO of OpenSea, and the workforce reduction will help the company maintain its position and grow.
For those impacted, Finzer says the firm will provide “generous severance, which includes healthcare coverage into 2023, and accelerated equity vesting for those who haven’t hit their cliff.”
OpenSea has 769 employees listed on its LinkedIn profile, though he declined to say how many of those are in the company’s 20% workforce.
Finzer also emphasized the fact that the NFT trading platform was launched during a crypto winter and has since built a strong balance sheet through fundraising and proven product fit records.
Digital art and collectibles are expected to generate hundreds of millions of dollars in revenue for the popular marketplace in 2021, helping it reach a $13.3 billion valuation in January.
The collapse of TerraUST and its sister token LUNA, followed by a rise in the Federal Reserve’s interest rate, both had a negative impact on the global financial market, and this has brought down the entire NFT market.
OpenSea’s sales volume dropped dramatically in June due to the market crash, from $2.6 billion in May to a record $700 million in June, far below the $5 billion it recorded in January.
As soon as the crypto winter is over, we can expect to see more technological advancements in NFT. This puts them in a better position to capture what will soon be the largest market on Earth,” he said.