OpenSea has found itself stuck in the doldrums of the ongoing crypto winter, and seeing that it doesn’t have enough food for the entire crew, it’s made the hard choice to throw a good few shipmates overboard.
Company CEO Devin Finzer copied an internal message on his Twitter telling employees they were reducing total staff by around 20%. He said they were providing them severance, including help finding new jobs and healthcare coverage until 2023.
The company’s LinkedIn lists the total number of employees as 769, though previous reports from last year showed that the team had been very short on manpower for processing the overall NFT volume. OpenSea’s job page still lists several open senior and software engineering positions.
“We’ve been through winter before, and we built this company with the cyclicality of crypto in mind,” Finzer wrote. “Nevertheless, the reality is that we have entered an unprecedented combination of crypto winter and broad macroeconomic instability.”
The CEO further said that these cuts will allow the company to operate “under various crypto winter scenarios.” He also said he remained confident this is the last time they’ll have to do such drastic cuts.
OpenSea’s beleaguered captain said he expects there will be “an explosion in innovation and utility across NFTs.” What that will look like is anyone’s guess. There have been some attempts at novel uses for NFTs, but the biggest movement in the space has come from belated attempts to cash in on a flatlining trend from the likes of Snapchat or toy company Mattel.
OpenSea is still the biggest name in the NFT space, with CNBC once calling the platform “the Amazon of NFTs.” The company reported a monthly trading volume of $5 billion in January and it still maintains the highest number of traders compared to other marketplaces.
Now, OpenSea joins the gallery of fellow crypto companies slashing staff to deal with economic uncertainty. Companies like Coinbase, BlockFi, and Crypto.com have all introduced massive staffing cuts. It comes at a time when the price of most crypto is lingering at the bottom of the ocean. But for NFTs specifically, there’s been a bearish attitude that has attached itself to the market. NFT sales volume is down nearly across the board.
But OpenSea itself might be a part of the problem, rather than the solution. The largest NFT marketplace has been on the defensive since the start of this year, when the company proved that a majority of the tokens being crafted in its free minting tool were fake or spam. In February, the company was left reeling when a phishing attack allowed hackers to steal $1.7 million in NFTs from users. Just recently, a former product manager at OpenSea was arrested for allegedly using insider knowledge to make money on NFT sales.
The company introduced a new verification system in May that was meant to deal with accused fakes, but with the subdued rollout of fellow NFT platforms from the likes of Salesforce, and with Reddit even trying to obscure its own tokens by just not calling them NFTs, it’s hard to see where any further enthusiasm for tokens of the nonfunged variety will come from.