Web3 startup Yuga Labs, renowned for its creations like Bored Ape Yacht Club and CryptoPunks, has unveiled plans to undergo a significant restructuring that includes employee layoffs within its U.S. team. CEO Daniel Alegre communicated this decision to company employees via email before posting the announcement on Yuga Labs’s website on October 6.
While the exact number of affected employees was not disclosed, a message by co-founder Greg Solano, shared on X (formerly Twitter), suggested that the company still maintained a workforce of more than 120 U.S. employees.
Alegre articulated that Yuga Labs had found itself under-resourced to effectively manage its current slate of projects. As a result, the company has made the strategic decision to consolidate its efforts and refocus on its core projects.
In essence, Yuga Labs is committing itself fully to “Otherside,” its gamified metaverse. Daniel Alegre, who joined Yuga Labs from gaming giant Activision Blizzard six months ago, appeared to be an integral part of strengthening the development and monetization of Otherside. His appointment was accompanied by the hiring of Spencer Tucker as the company’s first Chief Gaming Officer.
Otherside is being conceptualized as a virtual realm to house Yuga Labs’s NFT brands, including Bored Ape Yacht Club, CryptoPunks, 10KTF, and Meebits. Alegre’s announcement conveyed that while BAYC and CryptoPunks brands and communities would continue to grow, the 10KTF and Meebits teams would be integrated into Otherside.
Over the past 18 months, Yuga Labs has presented game demos, sold virtual land called “Otherdeeds,” and established partnerships to enhance its gaming capabilities.
Alegre acknowledged the challenges faced by the company, particularly in the realm of gaming execution, and emphasized the need to make substantial progress with the development of Otherside. He pointed out that Yuga Labs wasn’t optimally equipped to handle all aspects of its operations in-house.
The decision to downsize the workforce comes at a time of ongoing challenges for crypto and Web3 companies in a market that has seen a decline. Yuga Labs reported a drop in royalty revenue from $8.7 million in Q1 to $2.5 million in Q3. While the company did not specify the market’s impact, Alegre’s message acknowledged the challenging environment, both for the industry and the global economy.
Yuga Labs is also considering further layoffs, as indicated by Alegre, who mentioned the active review of the company’s international teams.
It’s worth noting that in March 2022, Yuga Labs secured $450 million in venture capital funding, valuing the company at $4 billion. This restructuring is a strategic move in response to the evolving needs and priorities within the Web3 and NFT space.
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