OpenSea, a prominent non-fungible token (NFT) marketplace, has announced a significant workforce reduction, with plans to lay off half of its employees as part of a broader restructuring effort.
CEO Devin Finzer took to Twitter to reveal the company’s intention to undergo substantial changes and shift its focus towards a new iteration, OpenSea 2.0. He mentioned that OpenSea was transitioning to a smaller team while building a new foundation and expressed gratitude to the departing employees, acknowledging that such transitions are always challenging. Finzer emphasized that these changes are being made with the OpenSea community in mind and to better align with user feedback.
OpenSea had been experiencing a decline in its market position and reputation, with Finzer acknowledging that the company had been feeling more like a follower than a leader in the NFT space. In response to this, the company aimed to move with greater speed, quality, and conviction to make more substantial innovations. The restructuring was designed to prepare the team for the next significant product upgrade, OpenSea 2.0.
Affected employees were assured of receiving certain benefits, including an accelerated equity vesting schedule, four months of severance pay, and six months of continued health services.
OpenSea, once a dominant player during the NFT market’s surge, had raised $300 million in January 2022 and was valued at $13.3 billion at that time. However, the gradual downturn in the NFT market had an impact on its standing. The platform faced criticism for not adequately compensating creators, despite its substantial funding, which prompted a policy change earlier this year. This recent round of restructuring follows a previous set of layoffs in July 2022.
NFTs, which had experienced a meteoric rise, were now facing a downward trend. Data from DappGambl, a crypto gambling platform, revealed that the vast majority of NFT collections were now deemed “worthless.” The report noted that 95% of NFT holders were holding assets with no market value, highlighting the high-risk nature of NFT investments and the importance of conducting thorough due diligence.
Furthermore, there appeared to be an oversupply of NFTs, with a significant portion of collections remaining unsold, signifying a lack of demand to match the available supply.