Cryptocurrency exchange Luno, owned by Digital Currency Group, announced a massive job cut on Wednesday.
The layoffs will affect 35% of Luno’s total workforce, CEO Markus Swanepoel said in a post on the cryptocurrency exchange’s website. They come after what Swanepoel called “an incredibly difficult year for the technology industry in general and for the cryptocurrency market in particular.”
Over the past year, prices for some popular cryptocurrencies have plummeted. Bitcoin, for example, has fallen by almost 39% over the past 12 months, while Ethereum and Solana have fallen by about 37% and 74%, respectively.
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According to Swanepool, “turbulence” has affected Luno’s “overall growth and revenue performance”, leading to layoffs and other measures.
He pointed to “a number of unforeseen and very extreme events,” including “a global economic downturn,” “an even bigger downturn in the tech sector as a whole,” a “crypto winter,” and recent events in the crypto industry that have hurt it. . One of the “shocks” was the recent rapid collapse of the FTX exchange.
FTX has been in Chapter 11 bankruptcy proceedings since it filed for it a couple of months ago. In connection with the firm and its sudden collapse, founder and former CEO Sam Bankman-Fried faced numerous criminal charges to which he pleaded not guilty.
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Such events “in turn [have] had an indirect impact on us in several ways: on the capital side, a much more limited funding environment, with the market focus shifted from long-term investments to short-term profitability, and on the operational side, a negative impact on market sentiment and therefore growth and earnings for our business, and to all our colleagues and competitors,” Swanepoel told employees.
Luno’s customers and operations were unaffected, according to the CEO.
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Other companies in the industry recently announced layoffs after a bad year for crypto.
Crypto.com announced plans to cut 20% of its employees in mid-January. Earlier this month, Coinbase said 20% of its employees would be laid off.
At the end of November, Kraken cut about 1,100 jobs.