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Yuga Labs, the $4 billion startup behind the Bored Ape Yacht Club and other prominent NFT projects, announced Friday that it has restructured the company and eliminated certain roles as a result, leading to layoffs.
In a team email that was also shared publicly, Yuga Labs CEO Daniel Alegre wrote that he believed the startup had taken on too much internally, and that the company needed to refocus while tapping more external partners along the way.
“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 wrote about his evaluation of the company after joining from Activision earlier this year.
Alegre did not specify how many people were affected by the layoffs, and a Yuga Labs representative declined to clarify the figure to Decrypt. In the post, Alegre wrote that the restructuring impacts only United States-based employees for now, and that the company is still evaluating its international teams.
Yuga Labs co-founder Greg Solano wrote in a tweet that the team still comprises more than 120 employees. As of last November, Yuga Labs said that it had more than 100 global full-time employees following its acquisition of WENEW.
I’m sure many of you have seen the news that Yuga is undergoing a restructure today. Shit day obviously. Hurts to part ways with team members who have been in the trenches with us. But we needed to make some changes to the company in order to make sure we’re set up for longterm… https://t.co/RF0QGydqze
— Garga.eth (Greg Solano) (@CryptoGarga) October 6, 2023
“Shit day, obviously,” Solano wrote. “Hurts to part ways with team members who have been in the trenches with us. But we needed to make some changes to the company in order to make sure we’re set up for long-term success. We’ve been spread quite thin for a while as a company, and while there have been some wins, our execution in other areas hasn’t been up to our standards.”
Solano’s comments echo those of the CEO. In the post, Alegre pointed to what he called successful projects this year, including the buzzy Dookey Dash game, the TwelveFold generative art pieces via Bitcoin Ordinals, and partnerships with BAPE and Gucci. However, he also said 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.”
Yuga Labs has already made moves in this regard with Otherside, its upcoming metaverse game. In September, the startup announced various technical and creative partnerships for development of the game, and on Thursday, the company announced a strategic investment in one of those firms, spatial computing startup Hadean.
Alegre wrote in the post that Yuga is “going all-in on our Otherside strategy,” and that all ongoing digital content from the company will tie into the metaverse platform. He also said that its teams focused on NFT avatar project Meebits and the 10KTF digital apparel project will be folded into Otherside.
The CEO also acknowledged that Yuga hasn’t been “building in public” with Otherside as much as it planned to, but said that further updates on the metaverse platform will be coming. In addition, he alluded to broader industry headwinds that have affected many companies building in crypto, not to mention wider economic struggles.
“It's a challenging time, not only for our industry but also for the global economy,” he wrote. “We must stay focused on our core strengths as we continue to create unique, engaging experiences for the broader Yuga audience.”
Yuga Labs was founded in early 2021 and had immediate success with the launch of the Bored Ape Yacht Club, an Ethereum NFT profile picture (PFP) project that quickly became arguably the most prominent collection in the space. Amid broader NFT market hype, Bored Ape NFTs sold for million-dollar prices in some cases, and were snatched up by celebrities.
The firm raised $450 million in March 2022 at a $4 billion valuation, shortly after purchasing the influential CryptoPunks NFT IP from Larva Labs, along with Meebits. The Bored Ape-themed ApeCoin crypto token launched around the same time, and an NFT land sale for Otherside broke sales records in late April 2022.
But as demand for NFT collectibles has plummeted over the last year-plus, prices for Bored Apes and other “blue chip” NFTs have fallen sharply, as has the price of ApeCoin. Yuga Labs grew substantially on the back of the Bored Ape buzz, but amid a weakened NFT market, the company is now slimming down as it seeks a sustainable model.