Luno retrenching 35% of staff
Luno has informed staff that it is retrenching 35% of its global workforce.
“2022 has been an incredibly tough year for the broader tech industry, and in particular the crypto market,” Luno CEO Marcus Swanepoel (pictured) wrote in a message to employees on Wednesday.
Swanepoel said Luno has unfortunately not been immune to this turbulence, which has affected its 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,” he said.
According to Luno’s LinkedIn profile, it has over 600 staff. LinkedIn reports that 962 people have listed Luno as their employer.
Working with those figures, Luno will be laying off between 210 and 337 people.
Luno confirmed that its South African workforce would be affected.
It did not disclose details of the severance packages Luno would offer, but Swanepoel said they would handle the departures with the empathy, generosity, and gratitude they all deserve.
News of lay-offs at Luno comes less than a week after Luno cofounder and CTO Timothy Stranex quietly departed the company in December.
In a statement, Luno told MyBroadband Stranex would be pursuing personal projects, and has handed over to former VP of Engineering Simon Ince.
Marius Reitz, Luno’s general manager for Africa, said it was managed exit that had nothing to do with the retrenchments.
In a letter to employees about the lay-offs, Swanepoel said some unforeseen and “very extreme events” have impacted the cryptocurrency industry.
This includes a global economic downturn coupled with an even bigger downturn in the tech sector overall.
“And on top of that, not just an ‘ordinary’ crypto winter, but a series of shocks including Luna [Terra], Three Arrows and FTX that have had an overall compounding effect on our industry,” said Swanepoel.
He said this impacted Luno in several 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
- On the operating side, a negative impact on market sentiment and consequently on growth and revenue for the business
Swanepoel said it’s not only Luno affected but all its peers and competitors.
“While we anticipated a downturn and proactively planned ahead with a business and funding model that can be resilient to some of these factors, the sheer scale and speed of all of this happening, and all at the same time, has put significant strain on our original plan,” he said.
“What this means in practice is that in addition to streamlining our strategy to focus on our core strengths, we need to also substantially decrease our cost base — which includes employee headcount in all of our markets — in order for us to be set up for success going forward.”
Swanepoel assured customer funds are safe.
“While none of this impacts our customers or operations, given all the sensitivity and misinformation in the market right now, I believe it’s also important to reiterate to everyone that customer funds are safe and operations continue as normal despite these very challenging circumstances.”
Swanepoel encouraged affected employees, saying that every minute spent working on Luno’s mission has been an important part of building the infrastructure for the next generation’s financial system.
“While today is a sad day for everyone, it’s important to remember why we are all here in the first place: The financial system is more broken than ever, and with the increased social and political disturbances we’re seeing across the globe, the need for more sound money and a better financial system is bigger than ever,” said Swanepoel.
“Thanks to those who have helped us get this far, and also to those who will continue to drive forward our critical mission of putting the power of crypto into everyone’s hands.”
Loading ...