Luno to shed 35% of jobs to navigate 'crypto winter'

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 26 Jan 2023
Luno CEO Marcus Swanepoel.
Luno CEO Marcus Swanepoel.

Global crypto-currency firm Luno will cull its staff complement by 35%.

In an internal message sent to employees of the South African-born Luno, CEO Marcus Swanepoel said the company is adjusting the size of its team across all its markets, to navigate the current “crypto winter”.

As a result of the unforeseen and extreme negative events that have impacted the global crypto industry over the past few months, the Digital Currency Group (DCG)-owned company will let go of 35% of its employees, he said.

Bitcoin and crypto-currencies crashed in 2022, following a cocktail of negative events, including market turmoil, the liquidation of some big crypto exchanges and a lack of regulation that eroded investors' confidence in crypto-currencies.

“It is with deep regret that I have to announce we will be reducing our overall Luno team by 35%, impacting Lunauts in all of our regions,” said the CEO’s memo.

“2022 has been an incredibly tough year for the broader tech industry and in particular the crypto market. Luno, unfortunately, hasn’t been immune to this turbulence, which has affected our overall growth and revenue numbers.

“As a result, we have to readjust our focus to maintaining our leadership position in our core markets, and continue to lay a strong yet sustainable foundation for the business, as we prepare to come out of this current cycle in a very strong position.”

The news comes more than a week after Luno competitor announced it would reduce about 20% of its workforce – roughly six months after the company's first round of job cuts was announced last June.

Luno is the latest in a list of tech companies that have revealed retrenchments over the last few months. Massive job cuts have been announced in the tech sector, with Amazon, Microsoft, Google, Spotify, Meta (formerly Facebook), Twitter, Salesforce and Netflix among those retrenching staff.

According to Swanepoel, the global economic downturn, coupled with an even bigger downturn in the tech sector overall, and a series of shocks that have had an overall compounding effect on the industry, led to the company’s “unfortunate” decision.

Additional factors, he noted, include the collapse of FTX, which used to be the fourth-largest crypto exchange in the world, and the Luna crypto-currency price dropping significantly over the last few years.

“This, in turn, has impacted us indirectly in a number of ways: on the capital side, a significantly more constrained funding environment, with the market’s focus shifting from long-term investment to shorter term profitability, and on the operating side, a negative impact on market sentiment and consequently on growth and revenue for our business, along with all of our peers and competitors.”

Luno also announced its co-founder and CTO Timothy Stranex has left the company,after almost 10 years, to pursue personal projects.

Stranex, who exited in December, was part of Luno’s founding team, which included Swanepoel, Pieter Heyns and Carel van Wyk – who established the company in 2013. Seven years later, it was acquired by US-headquartered crypto giant DCG.

Simon Ince, Luno’s former VP of engineering, was appointed as its new CTO at the beginning of January.

“Coming from a background of leading diverse, multi-disciplinary engineering teams for tech-industry leaders such as at Microsoft, stepping into the CTO role at Luno is a hugely exciting opportunity for me,” comments Ince.

“I will lead Luno’s global engineering team as we continue to build a simple, intuitive app that promotes a safe and reliable experience for our 10 million customers across the globe.

“As Luno explores and innovates with new products to elevate this experience, we will also continue to develop the talent of our engineering team for success,” he comments.