Sky Mavis, the blockchain startup behind Axie Infinity, announced plans to lay off about 50 employees, or 21% of its workforce. The company attributed the layoffs to a new strategy focused on core products. Nguyen Thanh Trung, a co-founder, denied claims that the company’s financial situation was a factor in the decision.
“Instead, it is a strategic move that allows for a sharper focus and positioning Sky Mavis for hypergrowth in 2025 and beyond,” Trung insisted.
The co-founder, however, said affected employees would be given severance packages and job placement support.
The past two years have been a challenging period for Sky Mavis, whose popular Axie Infinity once dominated the market. However, the April 2022 hack, in which hackers stole more than 173,000 ETH and USDC stablecoins valued at over $600 million, marked a significant setback. This was the largest cryptocurrency heist of 2022.
Sky Mavis raised $150 million from investors to reimburse affected users. Since then, the company has recovered about $5.7 million, less than 1% of the stolen funds. Approximately 15% of this amount was allocated to cover recovery costs and expenses. While an additional $40 million has been recovered, the process to claim these funds is ongoing.
In addition to the financial impact of the hack, Sky Mavis, like other companies in the industry, has experienced a decline in the popularity of play-to-earn (P2E) games and user engagement. Critics cite factors such as a lack of clear regulations, scalability issues, and subpar gaming experiences as contributing to this decline.
However, despite these challenges, Sky Mavis remains optimistic, with Trung asserting that a Donald Trump presidency could be a pivotal moment for the Web3 ecosystem.
