• by Colin Kirkland , October 9, 2023

Yuga Labs, the startup that became famous with non-fungible token (NFT) creations like Bored Ape Yacht Club (BAYC), a wildly popular digital collection that prized itself on exclusivity, has announced layoffs as part of a company-wide restructuring.

Yuga Labs gained notoriety during a global NFT craze. Shortly after purchasing the CryptoPunks NFT IP from Larva Labs, Yuga Labs raised $450 million in March 2022 at a $4 billion valuation.

But a depleting NFT market, as well as overwhelming internal investments, according to Yuga Labs CEO Daniel Alegre, have caused the company to seek a more sustainable model.

Despite launching a variety of high-profile initiatives this year such as brand partnerships with BAPE and Gucci, Alegre said in a statement that some product launches have fallen short.

“Alongside these wins, there have been a few rocky rollouts, particularly in our gaming execution, because we learned along the way that we weren’t optimized to build and manage everything in-house, nor should we be,” Alegre wrote. “We also know we need to make greater progress with the development of Otherside,” the company's promised metaverse game.

“I realized very quickly that there were a number of projects that, while well-intentioned, either spread the team too thin or required execution expertise beyond our core competencies,” he added.

Alegre explained in his statement that the layoffs will only affect the company's U.S.-based team for now, but did not disclose what percentage of its employees it will be laying off.

In a tweet, Yuga Labs co-founder Greg Solano wrote that the company still has over 120 employees and said "we needed to make some changes to the company in order to make sure we’re set up for longterm success.”

The overall NFT market is also reaching new lows since its boom in July 2021.

Reports show that 95% of NFTs on the market are currently completely worthless. The downward spiral has continued consistently since sales hit $1.2 billion in February, with the prices of leading collections like Bored Ape Yacht Club plummeting to two-year lows.