NFT Fantasy Sports Startup Sorare Lays off 13% of Staff as Web3 Gaming Faces Challenges
Popular NFT fantasy sports startup Sorare has announced the laying off of 13% of its workforce, with 22 employees from its New York office being affected. However, the company is not shutting down its New York office, but instead plans to centralize certain functions and teams at its Paris headquarters to improve communication and efficiency, particularly within the product development team. Additionally, 11 employees from the New York office have been asked to relocate to Paris.
While these changes are underway, Sorare plans to hire more than 20 roles in the next six months, mostly to fill the positions that were laid off in Paris. The company aims to maintain its New York office to work with U.S. customers and foster brand partnerships with sports leagues such as the MLB and NBA. These partnerships have been secured for several years.
It is worth noting that the layoffs were not primarily financially motivated, but rather a strategic decision to extend the timeline for achieving growth goals. Despite the challenges faced by Sorare and the broader web3 sector, the company has retained an active community that continues to engage with its fantasy games. This suggests a potential path forward for Sorare, even as the web3 sector struggles as a whole.
Sorare, which offers users the opportunity to buy, sell, and trade NFT cards, witnessed impressive user transaction volume of $200 million in 2023. The company last raised capital in a $680 million Series B round in 2021, valuing it at $4 billion. However, interest in web3 companies has seen a decline among investors, leading to a significant drop in funding for the sector.
Despite these challenges, Sorare remains determined to navigate the current landscape, with plans to continue its operations and forge ahead in the evolving web3 space.
Analyst comment
Positive news: Despite layoff of 13% staff, Sorare aims to centralize certain functions, hire more positions, and maintain New York office. Retained active community and partnerships with sports leagues show potential for growth. Sorare remains determined to navigate the challenges and continue operations.
