OpenSea, a non-fungible token (NFT) marketplace, announced on Thursday that it has cut 20% of its workforce to cut costs in the face of a prolonged slump in digital asset markets. In 2021, OpenSea, the world's largest NFT marketplace, saw explosive sales growth as the rise of cryptocurrencies created a new group of crypto-rich speculators.
However, the nascent NFT market has declined in recent months as cryptocurrency prices have fallen and investors have become more risk averse in the face of high inflation, central bank rate hikes, and recession fears.
"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 on Twitter.
OpenSea's NFT sales volume on the ethereum blockchain fell to $700 million in June, down from $2.6 billion in May and a far cry from the nearly $5 billion peak reached in January. NFTs are blockchain-based assets that represent digital file ownership, such as images and text. According to Finzer, the job cuts will allow the company to maintain five years of growth at current levels under various potential downturn scenarios.