DCG-owned crypto exchange Luno is cutting 35% of its workforce

A deteriorating macroeconomic climate and the collapse of industry giants like FTX and Terra have weighed on Bitcoin’s price this year.

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Cryptocurrency exchange Luno is the latest company in the industry to make layoffs and plans to cut 35% of its global workforce.

The CEO of the London-based company, Marcus Swanepoel, briefed employees on the layoffs at 12pm London time on Wednesday in a livestreamed town hall.

“2022 has been an incredibly tough year for the broader technology industry and the crypto market in particular,” the company said in a statement shared with CNBC on Wednesday.

“Unfortunately, Luno has not been immune to this turbulence, which has impacted our overall growth and revenue.”

According to its LinkedIn profile, Luno has around 960 employees in total, which means more than 330 jobs will be affected.

The cuts hit Luno’s marketing teams in particular. A Luno spokesman told CNBC the layoff had “minimal or no impact on key operations and compliance teams.”

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Luno, which has offices in Africa, Southeast Asia and Europe, is part of crypto conglomerate Digital Currency Group.

DCG is one of several crypto firms hit by the fallout from the collapse of FTX, one of the world’s formerly largest crypto exchanges. Genesis, the lending unit of DCG, filed for bankruptcy last week.

Genesis’ bankruptcy filing followed a dispute with one of its competitors, Gemini, over a controversial lending arrangement that provided Gemini customers with high returns through Gemini Earn, Gemini’s high-yield lending product.

Gemini customers have saved $900 million on Gemini Earn. The service halted withdrawals after Genesis, which lent the funds to large institutional borrowers, paused customer repayments.

The crypto industry has been in a downturn known as “crypto winter” since the collapse of controversial algorithmic stablecoin TerraUSD in May last year. Higher Federal Reserve interest rates have also unsettled market participants.

Roughly $2 trillion in value has been erased from the overall crypto market since the crypto boom peaked in November 2021 — although Bitcoin has seen a slight uptick since the start of the year.

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The failure of TerraUST, coupled with a sharp drop in digital currency prices, triggered a cascade of other crypto failures including Three Arrows Capital, Voyager Digital, FTX, BlockFi and Genesis.

In a statement shared with employees on Wednesday, Luno’s Swanepoel said the industry had experienced a “series of shocks” that led to a constrained funding environment and a shift towards long-term profitability.

“While we anticipated a downturn and proactively planned ahead with a business and funding model that can withstand some of these factors, the sheer scale and speed of it all, all at the same time, has put a significant strain on our original plan,” said Swanepoel.

“In practice, this means that, in addition to streamlining our strategy to focus on our core strengths, we also need to significantly reduce our cost base – including headcount across all our markets – to be positioned to continue to thrive.”

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