Bored Ape Yacht Club creators Yuga Labs announce layoffs as NFT market’s struggles continue
The tech firm Yuga Labs is planning employee layoffs ahead of a general restructuring of the company. The changes within the company behind the popular NFTs (non-fungible tokens) Bored Ape Yacht Club and CryptoPunks follow the arrival of new chief executive Daniel Alegre and growing scepticism about the stability and longevity of the NFT market worldwide.
While it is not yet clear what percentage of the company’s workforce will be let go, Alegre explained the decision in a note, stating that Yuga Labs “need to place our bets on fewer key initiatives and team up with complementary external partners to make these experiences happen”. He went on to outline the necessity for a pivot away from the company’s split focus between its NFT collections and other endeavours.
Alegre joined Yuga Labs from video game developer Activision Blizzard in July 2023, as prices of Yuga’s two flagship NFT collections plunged dramatically. The move was seen by some as an attempt by the company to diversify from the NFT market into online gaming, a shift first signalled in March 2022, when the company first revealed its plans to develop the metaverse role-playing game Otherside. (That same month, Yuga Labs acquired the intellectual property rights to the CryptoPunk and Meebit NFTs from their creators, Larva Labs.)
Described by Yuga as a community-first metaverse project, Otherwise allows players to purchase “otherdeeds” to virtual land in the form of NFTs. Similar to the early metaverse project Second Life, players are able to buy and sell private plots of land, which they may use as personal property within the game. Although the Bored Ape Yacht Club and CryptoPunk brands previously existed as digital objects unto themselves, the Otherside project would allow players to combine their Yuga products in a single online environment, bringing their digital apes and punks into a metaverse setting as characters and interactive entities. Otherdeeds first went on sale in April of 2022 and had generated over $1bn in secondary-market revenue by May 2023. In spite of the momentum, as of October 2023 there is no scheduled release date for a fully-developed version of Otherside.
While the Otherside project may be exposed to the same anxieties as the NFT market due to its blockchain-based deeds to digital land, its success is seen as critical to Yuga Labs, whose stock has dropped roughly 50% in value since its highpoint in March of 2022. As Alegre told Axios in July, new updates to Otherside are part of an effort to calm the nerves of those who “still feel uncertain” about how the project will develop and retain value.
