Gharegozlou took to Twitter to share an email that was sent out to the team members, announcing as many as 51 employers are leaving the firm.
“The decision was incredibly difficult because of the amazing people affected but it is necessary and the right thing to do is to ensure a lean and efficient Dapper Labs,” reads the CEO’s note.
We said goodbye to 51 brilliant colleagues and friends today @dapperlabs – this is the note I sent our team.
We remain fully dedicated to our core communities and committed to building amazing products that push the world forward together.
If you’re looking to hire some of the… pic.twitter.com/xwhjZAYLN8
— roham (@roham) July 13, 2023
The Vancouver-based Dapper Labs is best known for one of the earliest experiments with NFTs back in 2017 when it launched CryptoKitties, a blockchain-based “game” involving collectible “kitties,” each of which was tied to an NFT.
The company raised $305 million in March 2021, with the raise reportedly bringing its post-money valuation to a whopping $2.6 billion.
“With this restructure we have made the business more lean, which is going to let us do the right thing for our fans and grow our communities in the most healthy ways possible,” said Gharegozlou.
The company’s LinkedIn page shows it currently has 361 employers.
Decrypt has reached out to Dapper Labs for additional comments and will update this story should we hear back.
The Dapper Labs CEO also maintains that both the company and Flow, the blockchain network behind NBA Top Shot, are “well capitalized to pursue our mission.”
“Flow is also funded with a separate pool of capital, so that team also has several years of cash runway with no need to sell tokens to fund short-term operations,” said Gharegozlou.
Today’s news comes amid the recent struggles for the broader NFT market, with floor prices dropping and the NFTGo’s Blue Chip Index, which is calculated by weighting the market cap of some most popular collections, falling to 5,867 ETH by press time from the yearly high of 12,394 ETH in July 2022.
Separately, Dapper Labs is facing a class-action lawsuit alleging the company’s NBA Top Shots collection NFTs are securities and as such should be registered with the Securities and Exchange Commission.
In February this year, just days before the previous round of lay-offs, the judge overseeing the case denied Dapper Lab’s request to dismiss the suit, stating that the NFTs offered on its platform indeed appear to satisfy the requirements of a security.