Candy Digital, the Non-fungible token (NFT) platform, laid off a third of its staff this week, as confirmed by employees and first reported by Sportico. The NFT startup was co-founded by Gary Vaynerchuk, Mike Novogratz’s Galaxy Digital, and online retailer Fanatics. The layoffs come amid a surge of cuts across the tech industry and declining NFT sales volumes.
Within a few months of launching, the startup was valued at $1.5 billion after raising $100 million through a Series A funding round co-led by Softbank and Insight Partners. The meteoric rise came amid the sports NFTs hype, and having sports licensing firm Fanatics as Candy Digital’s major shareholder.
Candy Digital is the latest blockchain company offering NFTs and cryptocurrencies to resort to staff cuts due to declining demand and sales volumes. In July, OpenSea, the NFT marketplace, also announced a 20% reduction in its workforce, citing macroeconomic conditions. Shareholder Galaxy Digital is likely to reduce staff by at least 20%. Earlier in November, Dapper Labs, the blockchain firm behind NBA Top Shot reported a 22% cut in its workforce. The downsizing came after NBA Top Shot reached a mere $2.6 million in sales in October 2022, compared to $40.8 million in October 2021, as well as a consistent decline in sales and unique buyers over the past months.
The cuts are a ripple effect from the broader tech industry downturn, with big tech names downsizing their workforce and implementing hiring freezes. Earlier this month, Elon Musk instituted company-wide cuts impacting half of Twitter’s workforce. Meta laid off more than 11,000 of its employees, whilst Lyft and Stripe laid off more than 10% of their employees. Tech giants Apple and Amazon have also put hiring freezes in place to cut costs.