On Thursday, the nonfungible token (NFT) marketplace OpenSea announced mass layoffs. The recent OpenSea layoffs illustrate the catastrophic condition of the crypto market, whose total value has dropped by more than two-thirds since its peak last year.
Co-founder and CEO Devin Finzer took to Twitter Thursday afternoon to announce that his company would be laying off up to 20% of its workforce. Finzer blamed the layoffs on “an unprecedented combination of crypto winter and broad macroeconomic instability” in a lengthy note to staff.
“We need to prepare the company for the possibility of a prolonged downturn,” Finzer wrote. “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 will only have to go through this process once.”
Impact of crypto winter
After the market reached record highs in the latter half of 2021, the multi-trillion dollar cryptocurrency price drop known as “crypto winter” followed.
Today is a hard day for OpenSea, as we’re letting go of ~20% of our team. Here’s the note I shared with our team earlier this morning: pic.twitter.com/E5k6gIegH7
— Devin Finzer (dfinzer.eth) (@dfinzer) July 14, 2022
The grim conclusion that no company is exempt from the downdraft of the crypto winter was brought home by the news that OpenSea, the largest NFT market in the world by volume, was laying off employees.
In recent months, mass layoffs at cryptocurrency businesses have become the norm, with firms like Gemini, Crypto.com, BlockFi, and Coinbase eliminating hundreds of workers. One estimate states that crypto firms cut 1,700 payrolls in June alone.
“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” Coinbase’s CEO and co-founder Brian Armstrong said in a June 14 blog post, announcing the layoffs.
Nonetheless, not every company in the field is laying off workers; exchange titans Binance, Kraken, and FTX have all reaffirmed intentions to hire more people in the coming months.