OpenSea's trading volumes have slumped in recent months. They hit a record high of $5 billion in January 2022, but dwindled to just $700 million last month.
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OpenSea is cutting 20% of its workforce.
The NFT marketplace said the drastic move was in response to "an unprecedented combination of a crypto winter and broader macroeconomic instability."
Devin Finzer, the company's CEO, said OpenSea needed to prepare for the possibility of a prolonged downturn — telling staff:
"The changes we're making today put us in a position to maintain multiple years of runway under various crypto winter scenarios (five years at the current volume) and give us high confidence that we will only have to go through this process once."
OpenSea's trading volumes have slumped in recent months. They hit a record high of $5 billion in January 2022, but dwindled to just $700 million last month.
On top of that, the platform is facing increasing competition from new entrants into the space — Coinbase and Instagram among them.
Finzer still believes that NFTs have the potential to become "the largest market on the planet," adding:
"We have a huge opportunity in front of us. During this winter, I expect that we'll see an explosion in innovation and utility across NFTs … When the global economy is uncertain, our mission to build the foundation for new, peer-to-peer economies feels more urgent and more important than ever. Winter is our time to build."
The executive confirmed that those losing their jobs will receive a generous severance along with healthcare coverage until next year.
And stressing that the company remains on a solid financial footing, Finzer explained:
"We've been through winter before, and we built this company with the cyclicality of crypto in mind. We've also built a very strong balance sheet through the money we've raised and the product-market fit we've proven."
