OpenSea to Lay off 20% of Employees

OpenSea has become the new victim of the ongoing crypto winter as it has decided to slash its workforce.

According to a report from the Wall Street Journal (WSJ), the non-fungible token (NFT) marketplace has announced that it will cut a fifth or 20% of its staff.

OpenSea, one of the largest marketplaces for NFTs, suggested that about 57 people will be laid off as it said it now has 230 employees.

While, according to TechCrunch, the company's LinkedIn page indicates it has 769 employees, which would mean roughly 150 people lost their jobs.

Chief Executive Devin Finzer said in an internal memo to employees, also shared on Twitter, that the firm would provide severance and healthcare coverage into 2023 to those laid off. Finzer added that accelerated equity vesting will also be provided.

"The changes we're making today put us in a position to maintain multiple years of runway under various crypto winter scenarios (5 years at the current volume) and give us high confidence that we only have to go through this process once," Finzer said.

The layoffs are a contradiction to Finzer's claims in January after raising $300 million in venture capital funding when he said that the funds would be used to hire 90 new employees and establish a fund for creators.

As the crash in cryptocurrency prices has continued to wreak havoc on digital-asset firms, the market capitalization of digital currencies is now below $1 trillion - a big drop from nearly $3 trillion in late 2021, data from CoinMarketCap showed.

The layoff has come at a time when the NFT marketplace has been experiencing a declining user base. The decline initially started following a June incident when a former employee was charged with fraud and money laundering by the Justice Department. The prosecutors said that incident was the first case of insider trading of digital tokens, the WSJ reported.

Other crypto firms that have laid off employees due to the market downturn include U.S. cryptocurrency exchange Coinbase Global Inc., which reduced staff by 18% in mid-June, and the firm's shares fell to nearly 79% throughout this year.

According to a report from Blockchain.News, crypto exchange Crypto.com and lending platform BlockFi also announced in early June plans to cut over 400 jobs globally due to the pressure from difficult market conditions.

Crypto.com had said it would reduce its workforce by 5%, which is about 260 employees, while BlockFi announced a 20% layoff of its workforce, which is around 170 people.

Data from The Block showed that the NFT market peaked in January with $16.6 billion in monthly volume, which was a robust growth from its more than $350 million in July 2021. However, it slumped down to about $1 billion in June due to a decrease in activity in the digital asset sector.