Dapper Labs' Downtrend Affecting Web3

    TheMorningCrypto Desk
    TheMorningCrypto Desk
    Published on November 4, 2022 6:49 PM

    Updated on January 9, 2023 12:50 PM

    According to a message from its CEO, Roham Gharegozlou, Dapper Labs, the organisation behind the NBA Top Shot and NFL All Day digital trading systems, is getting rid of 22% of its employees.
    Dapper Labs' Downtrend Affecting Web3
    Source: Dapper Labs

    As the bear market in cryptocurrencies continues to have an adverse effect on Web3 firms, Dapper Labs is drastically cutting back on staff.

    In general, IT businesses have been making cost-cutting announcements like hiring freezes and layoffs as the economy continues to deteriorate, and venture-backed fintech startups have also announced employee reductions in their respective headcounts.

    Major corporations like Amazon, Google parent Alphabet, and Facebook owner Meta have also moved to decrease expenditures by halting recruiting or reducing employment. Big businesses, including Netflix, Spotify, Coinbase, and Shopify, have also announced layoffs.

    An important message from Gharegozlou was uploaded on the official website of Dapper Labs. Read it here.

    Before the layoffs in just two years, the company employed more than 600 people. The business will now be "doubling down on what will move the needle and get the whole industry to its next inflection point — and pulling back on everything that doesn't fit that focus," the CEO stated in the official message.

    The community lead for Dapper Labs, AJ Curry, tweeted about this 22% reduction. She stated:

    As you may know, Dapper Labs was established in 2018, but it gained popularity in early 2021. In March 2021, when interest in NFTs peaked, the platform reportedly saw more than $224 million in sales spread over 1.3 million transactions.

    Applying a similar strategy to what it did with the NBA around its highlights, Dapper Labs established an NFT platform with the NFL in August this year called NFL All Day. However, Dapper Labs' platforms have become less well-known as public interest in NFTs has decreased.

    Sales on the NBA Top Shot platform totalled $2.7 million in October, the first month of the 2022–2023 NBA season, down from $40.9 million the year before, a 94% decrease. Sales on the site have fallen for four months in a row, and in October, there were 13,462 unique purchasers as opposed to 65,769 in October 2021. The NFL All Day market also experienced a drop, with volume in October falling from $14 million in September to $6 million.

    In his team letter, Gharegozlou detailed the leadership's approach to the layoffs at Dapper Labs, outlining how they examined each business line to see if each endeavour advanced the mainstream adoption of Web3 and if it fit within the company's core competencies.

    The business highlights how it intends to assist people who have lost employment. "We have worked to create a package of benefits so you can receive compensation, health, and other benefits from Dapper Labs while you seek your next opportunity," Gharegozlou wrote to help to leave team members. A public talent directory, resume and career coaching, three months of severance pay, and alumni assistance are some of the measures.

    The number of affected employees was not made public by the firm. We will let you know as soon as we learn that information, which we are currently awaiting.