On Feb. 23, Dapper Labs CEO Roham Gharegozlou sent a letter to the team announcing a “corporate restructure” and the layoffs.
“As part of this restructure, we have made the difficult decision to part ways with team members representing 20% of full-time employees.”
The firm has previously cited too-rapid growth, with a headcount ballooning from 100 to 600 employees in less than two years during the NFT boom.
The company is the developer behind some of the most popular NFT collections in the world, such as NBA Top Shots and the first game to overload Ethereum back in 2017, CryptoKitties.
Dapper Labs Adds to Crypto Layoffs
Despite the staff reductions, Gharegozlou said the firm “remains in a strong cash position with no outstanding debt.” He added that “we are committed to our flagship products, tremendously excited about several major launches coming up this year.”
For the unfortunate ones facing the axe, there is a benefits package that includes “generous compensation, health continuation benefits, extended exercise windows for equity stock options, and mental health benefits as well as job search support.”
The layoffs across the crypto industry have continued despite markets being up 38% so far this year. On Feb. 22, blockchain research and analysis firm Messari announced that it was laying off 15% of its workforce. “Market headwinds” in the crypto sector were cited as the cause.
In January, digital asset exchange and wallet provider Crypto.com announced a 20% reduction in staff. However, stablecoin issuer Circle has bucked the trend with a 25% increase in its workforce.
Ongoing Court Case
Furthermore, Dapper Labs is currently embroiled in a court case. On Feb. 22, United States District Court Judge Victor Marrero denied the firm’s request to dismiss a lawsuit regarding the Top Shot NFT collection.
The judge claims that the NFTs offered by Dapper Labs appear to meet the definition of a security. Gharegozlou said:
“There is a lot of misinformation circulating about the nature of this ruling. All the ruling means is that the case goes to discovery with absolutely no substantive decision on whether NBA Top Shots are securities.”
Today’s order in the Friel v. Dapper Labs matter – which the Court described as a “close call” – only denied our motion to dismiss the complaint at the case’s pleading stage. The judge did not conclude the plaintiffs were right, and it’s not a final ruling on the case’s merits.
— Dapper Labs (@dapperlabs) February 22, 2023