Dapper Labs Faces Challenges as NFT Market Struggles, Announces a New Round of Layoffs

Updated: 13 July 2023

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The crypto industry has seen numerous hardships in the last year and a half, including the Terra blockchain collapse and the bankruptcy of the FTX exchange.

However, while these massive events were strong enough to shape the crypto industry, other individual projects and companies have suffered as well. While their impact on the industry may have been smaller, the hardships still affected numerous lives.

One example of this is Dapper Labs, a company that created multiple popular NFT collections known around the world.

The two biggest examples include NBA Top Shots and CryptoKitties. Dapper Labs has already gone through two rounds of layoffs, and now, it announced the third one.

Dapper Labs fires 51 employees

According to the company’s CEO, Roham Gharegozlou, the firm must lay off 51 more employees. The CEO shared the decision on Twitter, stressing:

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.

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

Gharegozlou noted that the laid-off employees were all brilliant colleagues and friends in his announcement. He also issued a note to any Web3 business looking to hire, recommending the members that Dapper Labs had to say goodbye to.

Dapper Labs was restructured in order to be more efficient

While numerous companies are releasing NFT collections these days, the Vancouver-based Dapper Labs was one of the first to experiment with this technology in 2017. Back then, the firm launched CryptoKitties, the first Ethereum-based NFT collection and crypto game.

That was still too early for the NFT revolution, the company did raise over $300 million in March 2021, once NFTs captured the attention of the entire crypto world. The raise reportedly brought its post-money valuation to $2.6 billion.

However, the crypto winter of 2022 took a toll on much bigger and stronger companies than Dapper Labs, so it also felt its fair share of hardships. The firm was forced to lay off 22% of its workforce in November 2022. Only a few months later, in February 2023, it fired another 20% of its employees.

The firm’s CEO said the company had to restructure to make its business lean. Doing so would allow it to do the right thing for the customers and grow its communities in a healthy way.

Dapper Labs was left with 361 employees following the layoffs, according to its LinkedIn page. Gharegozlou further noted that both the company and the blockchain network on which NBA Top Shot runs, Flow, are well capitalized, allowing them to pursue their growth mission.

Flow actually draws funds from a separate pool from the firm. This will allow its team to run for several more years without having to worry about funding or selling tokens to fund operations.

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