With the crypto industry neck-deep in the prolonged bear market and NFT sales drastically lower than they were at the start of the year, companies have begun to lay off employees as the only solution to stem losses.
The most recent of them is the billion-dollar NFT platform Candy Digital.
Candy Digital
Candy Digital is an NFT marketplace backed by Fanatics, Michael Novogratz of Galaxy Digital, and Gary Vaynerchuk, an entrepreneur and NFT developer.
In June 2021, after its launch, the NFT platform announced a long-term agreement with Major League Baseball (MLB).
Since then, the company has expanded into other areas of sports licensing, including a partnership with World Wrestling Entertainment (WWE), all of the NASCAR teams (but not the league itself), and several college athletes.
The company also branched into entertainment-themed digital collectibles, including forming an association with Netflix that created various “Stranger Things” NFTs.
Candy collaborated with the stock photo company Getty Images to offer tokenized photos. The non-fungible tokens for Candy were issued on the Ethereum sidechain network, Palm.
Candy Digital was at its peak late last year following a successful funding round in October that raised around $100 million at a $1.5 billion valuation.
The fundraising was backed by notable names in the industry, including Insight Partners, Softbank, Peyton Manning, Gaingels, Will Ventures, and some active and retired athletes.
Layoffs
The NFT platform has joined the list of crypto-related businesses that engaged in layoffs this year, as it recently cut off over a third of its staff.
The announcement came on Monday, as Sportico’s sports business reporter Eben Novy-Williams disclosed that the NFT firm Candy Digital “is laying off a large chunk of its workforce,” citing “multiple people familiar with the decision.”
CandyDigital has not confirmed the reasons for the layoff, and the affected departments are undisclosed. Nevertheless, ex-CandyDigital employees have confirmed that the cut-down did happen.
Matthew Muntner, former Community Content Manager, took to Twitter to express his feelings at being one of Candy Digital’s former employees, now searching for other jobs.
“I hate that I have to share this as much as I loved my job at @CandyDigital, but I was part of the layoffs that occurred earlier today,” he tweeted.
The NFT community was quick to rally, as big-time players like Nick Rose, founder of EthernityChain, and Keith Marshall offered Muntner to join their team.
Downsizing In the NFT Space
In the NFT space, more marketplaces have resorted to staff cuts due to declining demand and low sales volumes.
In July, OpenSea announced that it would be laying off 20% of its staff due to the crypto winter and general macroeconomic instability.
“…the 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,” CEO Devin Finzer said in a message to employees.
In early November, the CEO of Dapper Labs, the non-fungible tokens (NFTs) firm famous for generating collectible moments based on highlights from the NBA and NFL, disclosed that they would be laying off 22% of the workforce.
“These reductions are the last thing we want to do, but they are necessary for the long-term health of our business and communities. We know web3 and crypto is the future across a multitude of industries –– with 1000x potential from here in terms of mainstream adoption and impact ––– but today’s macroeconomic environment means we aren’t in full control of the timing,” he wrote.
Over 1,700 Crypto Companies Have Announced Layoffs
With no positive turnaround in sight, the crypto-tech community has been on the edge of its seat, waiting for the next marketplace to fire employees or the next company to declare bankruptcy.
As of June, around 1,700 companies have carried out mass layoffs, per Business Insider’s calculations. The effects of the downsizing hit harder, considering the rate at which these companies were willing to expand and hire more workers during the crypto boom last year.
Notable mentions include Meta, laying off 11,000 employees in November after the company failed to meet Wall Street’s expectations for earnings.
Coinbase relieved 18% of its workforce of their job positions due to the economic recession, Bybit fired 20% to 30% of the staff, and Elon Musk let go of over 3,000 workers, citing the “need to reduce costs and become profitable.”
