By Elizabeth Howcroft and Lisa Pauline Mattackal
(Reuters) – Non-fungible token (NFT) marketplace OpenSea said on Thursday it would cut about 20% of its workforce to reduce costs in the face a prolonged slump in digital asset markets.
“The reality is that we have entered an unprecedented combination of a crypto winter and broad macroeconomic instability, and we need to prepare the company for the possibility of a prolonged downturn,” Chief Executive Devin Finzer said in a statement https://twitter.com/dfinzer/status/1547648521607659522 on Twitter.
NFTs are digital assets that exist on a blockchain and include everything from artwork to text and tweets.
OpenSea, the largest NFT marketplace, saw explosive sales growth in 2021 as the rise in cryptocurrencies created a new group of crypto-rich speculators.
But the NFT has market slumped in recent months, as cryptocurrency prices collapsed and investors ditched risky assets.
OpenSea’s NFT sales volume on the ethereum blockchain plunged to $700 million in June, down from $2.6 billion in May and a far cry from January’s peak of nearly $5 billion.
Finzer said the job cuts would allow the company to maintain 5 years of growth at current volumes under various potential downturn scenarios.
Other crypto- and digital asset-focused companies, including Coinbase Global, have been forced to cut jobs in recent weeks.
(Reporting by Lisa Pauline Mattackal in Bengaluru and Elizabeth Howcroft in London; Editing by Devika Syamnath)