Vancouver tech startups Dapper and Hootsuite both laid off this week.
Dapper Labs has laid off about 22% of its staff, BetaKit has learned.
The company confirmed the layoffs to BetaKit, noting that they were part of a broader refocusing of strategy and reorganization of teams.
The move makes Dapper Labs the second major Vancouver tech company this week to make job cuts as the economy continues to take effect: Hootsuite also recently laid off 5% of its staff in its second round layoffs since August.
“Our business has grown incredibly quickly…introducing operational challenges that have kept us from being as aligned, agile and community-driven as we should be.”
– Roham Gharegozlou,
CEO of Dapper Labs
Today’s layoffs at Dapper Labs follow various social media posts throughout this year that claimed the company had quietly laid off staff. At press time, Dapper Labs had yet to respond to requests for comment regarding additional layoffs made by the company earlier in the year.
The 22% reduction represents about 134 people, according to Dapper Labs’ LinkedIn profile, which shows 613 employees at the company.
The Dapper Labs layoffs follow the pattern of many technology companies, in Canada and elsewhere, which have raised massive funding in recent years, experienced significant growth, expanded rapidly and are now feeling the effects of the macro environment. .
In addition to general economic headwinds, Dapper Labs is also facing an NFT market crash. As Quartz writes, the once-booming NFT market has fallen to “nearly every traceable metric,” including in the art and gaming realms where Dapper Labs plays. As Quartz reports, NFT trading volume across all industries has fallen by around 90% since last year.
RELATED: Canadian Tech Firms Continue to Hire Despite Slowdown
The meteoric rise of NFTs over the past few years has been mirrored by Dapper Labs itself. Originally known as the Vancouver blockchain startup behind CryptoKitties, Dapper Labs has become globally known for its blockchain games and NFTs, like NBA Top Shot.
“We know Web3 and crypto are the future across a host of industries – with the potential to grow 1000x from here in terms of mainstream adoption and impact – but the current macro environment means that we don’t have full control over the timing,” Dapper wrote. Labs Founder and CEO Roham Gharegozlou in a letter sent to staff today about the layoffs.
He added: “These cuts are the last thing we want to do, but they are necessary for the long-term health of our business and our communities.”
In addition to staff cuts, Dapper Labs is also changing its product strategy. Gharegozlou called it a strategy built around a more sustainable cost structure.
“At Dapper Labs, we’re redoubling our focus on what will move the needle and bring the entire industry to its next inflection point — and we’ll pull out anything that doesn’t align with that goal,” a- he declared. “As we take big swings ourselves to reach 10x the size of the market, we must also become a focused, streamlined organization that enables us to achieve profitability, control our own destiny, and sustainably progress toward achieving of our mission, whatever the economic conditions over the next few years.”
The CEO did not share details of what that strategy will look like, but the company is expected to share details with employees at its town hall meeting on Thursday.
RELATED: Amid Crypto Crash, Dapper CEO Remains Highly Bullish on Web3
Gharegozlou remained publicly optimistic about the prospects for Web3 and NFTs. Earlier this year at Collision, the CEO noted that the current crypto crash was already the second the company has faced in its five-year lifespan.
“For me, nothing has changed,” Gharegozlou said at the time. “This technological shift is not about a new corner of the internet, it’s about doing it all over again,” he added, calling it “the biggest economic opportunity of my lifetime.”
Over the past year, Dapper Labs has raised several major fundraising rounds, including a $250 million round last September and $305 million last March. He has caught the eye of notable venture capitalists, including those of Andreessen Horowitz and Google, as well as celebrity and athlete angel investors like NBA and NFL stars Kyle Lowry, Kevin Durant, DK Metcalf and Stefon Diggs. The company also launched a $725 million ecosystem fund to drive innovation and growth in the Flow blockchain ecosystem.
Dapper Labs’ total funding to date is north of US$600 million. The financing has been accompanied by growth: the company has grown from 100 people to more than 600 in two years.
“We are builders with a bigger mission than ever,” Gharegozlou said. “Putting a Web3 wallet in every pocket is how we empower the next billion communities and the creators who serve them to control their own digital worlds.”
“Our comprehensive product strategy is to do things the market can’t: we start from the user and come back to the technology needed to enable an exceptional experience. The refocusing of our organization will allow us to take each step in a sustainable way: web3-native, mobile-first and community-driven.
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