Dapper Labs axes another 20% of its employees

Dapper Labs axes another 20% of its employees

On February 23, Dapper Labs CEO Roham Gharegozlou sent a letter to the team announcing a “corporate restructuring” and layoffs.

It's the second round of corporate layoffs following a 22% cut in November. Gharegozlou explained:

“As part of this restructuring, we have made the difficult decision to part ways with team members who represent 20% of the full-time workforce.”

The company has previously cited rapid growth, with its headcount increasing from 100 to 600 employees in less than two years during the NFT boom.

The company is the developer behind some of the world's most popular NFT collections, such as NBA Top Shots and the first game to overload Ethereum in 2017, CryptoKitties.

Dapper Labs Adds Crypto Layoffs

Despite the staff cuts, Gharegozlou said the company “remains in a strong liquidity position with no outstanding debt.” He added that “we are committed to our flagship products and are excited about several major launches this year.”

For the unfortunates facing the ax, there's a benefits package that includes "generous compensation, continuing health benefits, extended vesting windows for stock options and mental health benefits, and job search assistance."

Layoffs across the crypto industry have continued even as markets are up 38% so far this year. On February 22, blockchain research and analytics 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% workforce reduction. However, stablecoin issuer Circle has bucked the trend with a 25% increase in its workforce.

Ongoing legal proceedings

Additionally, Dapper Labs is currently embroiled in a lawsuit. On February 22, U.S. District Court Judge Victor Marrero denied the firm's motion to dismiss a lawsuit involving 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 will be disclosed without making a substantive decision as to whether NBA Top Shots is securities."

Today's decision in the matter of Friel v. Dapper Labs – which the court described as “close” – only denied our motion to dismiss the lawsuit in the pleading phase of the case. The judge did not conclude that the plaintiffs were right, and it is not a final decision on the merits of the case.

— Dapper Labs (@dapperlabs) February 22, 2023

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