OpenSea Cuts Half Its Workforce Amid NFT Slowdown

OpenSea, the leading NFT marketplace, has confirmed a significant reduction in its workforce, with around 50% of its employees being laid off. This drastic move comes as the company aims to adapt to the rapidly changing landscape of the digital collectibles market.

The decision to downsize was made public on Friday, with a company representative disclosing to Decrypt that the layoffs were company-wide, although the exact number of affected employees was not specified. The move is part of a broader strategy to reshape OpenSea into a leaner organization that can more effectively respond to the community’s needs and the fast-paced evolution of the NFT space.

Devin Finzer, the co-founder and CEO of OpenSea, took to Twitter to further explain the company’s decision. He acknowledged the community’s perception of OpenSea as a follower rather than an innovator in the space and expressed a commitment to reversing that narrative. Finzer announced a reorientation towards “OpenSea 2.0,” which promises to be a significant upgrade in technology, reliability, speed, quality, and user experience.

In pursuit of a more agile operational model, OpenSea will be adopting a flatter organizational structure. The company has also pledged to support the laid-off employees with four months of severance pay, half a year of health care, mental health services, and an expedited equity vesting schedule.

During the NFT boom of 2021 and 2022, OpenSea enjoyed a dominant position in the market, with monthly trading volumes reaching billions of dollars. This success translated into substantial funding, with the company securing $300 million at a valuation of $13.3 billion in its Series C round in January 2022.

However, the NFT market has cooled significantly since mid-2022, mirroring the downturn in cryptocurrency prices. OpenSea faced criticism for considering a change to its creator royalties policy, a move that was eventually shelved after pushback from the creator community. Despite this, OpenSea later announced it would cease enforcing mandatory royalty payments for most NFT sales starting August 31.

The marketplace has also faced stiff competition from Blur, which has overtaken OpenSea in NFT trading volume, thanks in part to Blur’s token-based trading incentives. Despite this, OpenSea still maintains the highest number of traders.

This is not the first time OpenSea has had to reduce its workforce; a previous layoff occurred in July 2022, which was attributed to the “crypto winter” and broader economic instability. The company had anticipated a prolonged downturn, which seems to have materialized, prompting the current layoffs.

As OpenSea navigates through these challenging times, the NFT community is watching closely to see if the strategic changes and the launch of OpenSea 2.0 will be enough to regain its leading position in the market.

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