Dapper Labs Inc., a leading company specializing in non-fungible tokens (NFTs), has announced another round of layoffs due to the ongoing struggles in the NFT market. This latest downsizing follows previous workforce reductions in February and November of last year, marking the third round of layoffs by the company. The current layoffs will affect 51 employees, which is approximately 20% of the company’s workforce.

CEO Confirms Layoffs

Roham Gharegozlou, CEO of Dapper Labs, confirmed the layoffs on Twitter, attributing the decision to challenging market conditions and a decreased interest in digital artwork. Gharegozlou emphasized that the difficult decision was necessary to ensure the company’s survival. He also assured stakeholders that despite the layoffs, Dapper Labs and its associated platform, Flow, remain financially stable.

Legal Challenges for Dapper Labs

In addition to the layoffs, Dapper Labs is also involved in a legal dispute. The company’s request to dismiss a lawsuit related to its NBA Top Shot NFT collection was denied by United States District Court Judge Victor Marrero. The judge suggested that the NFTs offered by Dapper Labs could potentially be classified as securities. However, a company spokesperson clarified that this denial does not imply that the plaintiffs are correct or indicate the final ruling on the case.

NFT Market Struggles

The NFT market has been facing significant challenges recently, with sellers dominating the market and causing an imbalance in NFT trading. Many well-known NFT collections have seen considerable drops in their floor prices. These conditions have led to layoffs not just at Dapper Labs, but also at other companies in the Web3 industry. Despite some recovery in the crypto market this year, the industry continues to witness ongoing layoffs.