OpenSea Lays off 20% of Employees to Prepare for a Prolonged Crypto Winter

Leading non-fungible token (NFT) marketplace OpenSea has slashed 20% of its workforce due to the ongoing economic slump, joining the long list of firms that have laid off their employees to stay afloat in the face of recession. 

Preparing for a Prolonged Crypto Winter

In a detailed note shared with employees, OpenSea CEO and co-founder Devin Finzer said the decision stemmed from “an unprecedented combination of crypto winter and broad macroeconomic instability.”

Finzer noted that the layoff is part of the company’s plan to prepare for the possibility of a prolonged bear market. According to the CEO, the workforce reduction would help OpenSea maintain its position and strengthen its growth under many years of unstable market conditions, at least five years with the current value.

In addition to preparing for a possibly long winter, Finzer said the firm will offer the impacted staff “generous severance, which includes healthcare coverage into 2023, and accelerated equity vesting for those who haven’t hit their cliff.” 

Although he did not disclose the number of employees that make up the 20% workforce, the company’s LinkedIn profile shows that OpenSea has about 769 workers.

NFT Market Slumps

Finzer also highlighted that the NFT trading platform was launched in a crypto winter and has since built a strong balance sheet through fundraising and proven product fit records. 

The popular marketplace hit a $13.3 billion valuation in January, thanks to the explosion of digital artworks and collectibles in 2021, which generated hundreds of millions of dollars in revenue for the platform. 

However, the entire NFT market has slumped over the past few months since the collapse of TerraUST and its sister token LUNA, followed by the Federal Reserve interest rate hike that negatively affected the global financial market. 

Due to the market crash, OpenSea’s sales volume drastically dropped in June with a record of $700 million compared to the $2.6 billion in May and far from the $5 billion it recorded in January. 

The CEO hinted that he expects to see more technological advancements in the NFT sector when the crypto winter is finally over. He added that the firm is in a “better position to capture what would soon become the largest market on the planet.”