OpenSea has let 20 percent of its staff go, in a colossal decision to weather the crypto winter that everyone in the NFT space is living in, according to a tweet from Co-Founder and CEO OpenSea Devin Finzer.
And while the broader context of a market downturn has many worried about the wider Web3 and NFT space, Finzer stressed his belief that we’re in for an “explosion in innovation and utility across NFTs,” hinting at a brighter future for everyone.
OpenSea’s CEO prepares for a ‘prolonged downturn’
While the crypto markets are living in a depression, many top players have shied away from saying so. But the NFT marketplace just took a major blow from OpenSea’s move to cut 20 percent of its employees. And CEO Finzer doesn’t hesitate to state the reality of the crypto world in 2022:
“…[T]he reality is that we have entered an unprecedented combination of crypto winter and broad macroeconomic instability, and we need to prepare the company for the possibility of a prolonged downturn,” Finzer wrote in a screen-capped message to his staff that he later shared on his Twitter page.
“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,” added Finzer, expressing his belief that this was a measure of cautious foresight, not a sign of the end.
OpenSea didn’t say precisely how many employees were losing their jobs in the wake of this decision, but its LinkedIn page suggests 750+ employees are still working there. Finzer added that employees affected by this decision will receive severance, including health insurance “into 2023,” in addition to equity vesting.
In January of this year, OpenSea declared its valuation of $13 billion after completing a round of Series C funding that totaled $300 million. Back then, OpenSea had only 90 employees, but with the new funding, Finzer said he intended to “grow the team” of customer service employees, inflating its ranks from 60 to 120 — which would boost the user experience for customers.
And since new year’s 2022, the global economy has changed a lot, to put it mildly. Bracketing the geopolitical shifts of the world, the NFT marketplace has faced repeated complaints of plagiarism, in addition to scams, hacks, and even legal issues.
Advances made during the crypto winter could elevate NFTs in the future
In contrast to these complications, Finzer and OpenSea Co-Founder Alex Atallah were dubbed the first NFT billionaires, both valued at $2.2 billion, in a recent Forbes report. Notably, some of the legal trouble with OpenSea involved a former employee named Nate Chastain, who was arrested in June for alleged insider trading schemes — a first for the NFT marketplace.
Then the decision to limit the number of NFTs someone could mint in a single day brought chaos to the digital marketplace, before OpenSea’s executives reversed that move, and booted Iran-based OpenSea users to keep the firm aligned with U.S. sanctions against the nation.
Of course, OpenSea isn’t alone in its journey through the long crypto winter. In June, several crypto startups, including crypto.com, Gemini, and even Coinbase, declared layoffs in a significant downturn for the NFT market. Meanwhile, the crypto hedge fund Three Arrows Capital has continued to be liquidated, and its founders seem to have vanished.
Every sector of nearly every industry is suffering downturns amid the macroeconomic prospect of a prolonged depression, from fossil fuel prices inflating to food and energy shortages. But Finzer isn’t wrong to point to the other side of the turbulent river, because advances made during this downturn will directly determine how high and for how long the next golden age for NFTs will fly.
This was breaking news about OpenSea’s significant staff cuts and was regularly updated as new information became available.