Vancouver-based Web3 company Dapper Labs has laid off 20 percent of its full-time employees.
A post from Dapper Labs founder and CEO Roham Gharegozlou called the latest round of layoffs part of a restructuring.
Rohan Gharegozlou asserted Dapper Labs “remains in a strong cash position with no outstanding debt.”
Dapper Labs did not share further details regarding the nature of this corporate restructure or disclose the exact number of employees that were impacted by the decision. According to LinkedIn, Dapper Labs currently has a headcount of 497, indicating that the layoffs could impact as many as 100 members of the company’s team.
When reached for additional comment, a Dapper Labs spokesperson did not respond to questions, instead directing BetaKit to the company’s letter to employees.
These cuts represent Dapper Labs’ second round of significant layoffs since November, when BetaKit reported that the firm shed 22 percent of its staff as part of a broader refocus of strategy and reorganization of teams. Prior to those cuts, per the company’s LinkedIn profile, Dapper Labs had 613 employees. According to LinkedIn data and the percentages shared by Dapper Labs, both rounds of layoffs put the company’s current headcount at less than 400.
Dapper Labs’ latest layoffs, first reported by The Block, were confirmed by Dapper Labs in a letter to employees published on February 23 to the company’s website. Gharegozlou wrote that Dapper Labs is cutting staff as part of a push to improve its “focus and efficiency.”
Dapper Labs’ most recent layoffs come as the firm contends with a broader crypto winter that has seen the demand for and value of the non-fungible tokens (NFTs) it develops drop. Amid these conditions and the NFT market crash, Dapper Labs is also facing a class action lawsuit claiming its NBA Top Shot Moments NFTs constitute unregistered securities.
The suit’s plaintiffs allege that Dapper Labs violated United States (US) securities law by selling Moments to professional basketball fans without registering them with regulators. The lawsuit also alleges that Dapper improperly controlled the collectibles. Earlier this week, United States District Judge Victor Marrero denied Dapper Labs’ motion to dismiss the suit before trial.
Founded in 2018, Dapper Labs is the blockchain company behind a variety popular NFT collectible projects, from CryptoKitties to NBA Top Shot. To date, the Web3 firm has raised hundreds of millions of dollars from a group of investors that includes Andreessen Horowitz, Google Ventures, Coatue, and Version One Ventures, reaching a reported valuation of $7.6 billion in 2021 during the NFT market boom.
But market conditions have deteriorated since then, and Dapper Labs has joined a growing list of other tech and crypto companies to lay off members of its team. As BetaKit has previously reported, in addition to its November layoffs and this latest staff reduction, Dapper Labs also quietly shed a number of other employees in what the company described as “performance-related” cuts.
Amid this challenging environment, Gharegozlou asserted in the letter that Dapper Labs “remains in a strong cash position with no outstanding debt.
According to Gharegozlou, Dapper Labs generated $135 million in top-line sales in 2022, down about 19 percent from the $167 million the company pulled in 2021 during the peak of the NFT market. These sales figures include money Dapper Labs generated from packs, five percent of transactions that took place on its marketplace, and wallet fees.
“With the right cost structure, we can think long term,” wrote Gharegozlou. “Our goal is to grow our communities sustainably, prioritizing the health and authenticity of each product.”
Despite these cuts and current crypto market conditions, Gharegozlou claimed that Dapper Labs remains committed to its flagship products, has several major launches planned for 2023, and is “more confident than ever that Web3 will remake digital life for the better for billions of people, over time.”
Feature image courtesy Dapper Labs.