Luno exchange, a Digital Currency Group (DCG) subsidiary, has become the latest crypto firm to announce massive layoffs set to cut about 35% of its global headcount.
On Wednesday, the London-based crypto company, with global offices in Europe, southern Asia, and Africa, told employees about its decision.
Luno Cites Market Distress As The Cause
Luno CEO, Marcus Swanepoel, said the ongoing difficult financial conditions are the main reason behind the decision. He regarded 2022 as a challenging year for the broader tech industry, specifically the cryptocurrency market. The CEO said Luno has not been immune to such upheavals, which have adversely impacted the company’s overall financial output and growth.
According to the company’s LinkedIn profile, Luna has a total number of 960 employees globally, which implies over 330 workers will lose their jobs due to the layoff. The CEO said marketing teams are most affected, while compliance and operating teams have minimal impacts.
DCG is one of several crypto companies impacted by the demise of the once-popular FTX exchange, which prompted a decline in the nascent sector. Last week, Genesis, another independent subsidiary of DCG, filed for Chapter 11 bankruptcy protection.
This company worked with the failed crypto exchange FTX; its collapse tanked the crypto lender’s balance sheet, which reported billions in losses. Several crypto firms declared bankruptcy following the bloodbath in crypto prices, a plunge that rattled the market in the first half of 2022.
Three Arrows Capital (3AC) was the first significant crypto firm to go bankrupt last year, brought down by the crash of Luna and TerraUSD in May. Celsius Network was another crypto lender brought down by the Luna/ Terra crypto crash.
In July, crypto lender Voyager Digital filed for bankruptcy protection after 3AC defaulted on a crypto loan worth over $650 million. BlockFi also filed for bankruptcy protection in late November after the company was adversely impacted by its exposure to the demise of FTX.
Apart from the bankruptcies mentioned above in the industry, several crypto firms such as Gemini, Coinbase, Crypto.com, Blockchain.com, and Huobi, among others, have continuously laid off their employees since the early past year, citing difficult market conditions.
Crypto Market Value Falls Under $1 trillion
At the time of writing, the global cryptocurrency market cap stands at USD 977.75 billion, a decline of 3.4% in the past 24 hours and more than 39.42% down one year ago, as indicated by Tradingview.
In November 2021, the global crypto market peaked at $2.9 trillion, but so far has fallen significantly since last May. The market has lost more than $1.9 trillion in value following the previous year, which saw investors dumping risk assets amidst inflation concerns and fears of interest rate hikes by the Federal Reserve.
The largest cryptocurrency is currently trading down more than 75% from its record high of $69,000 reached in November 2021. Ether is currently trading at $1,549.72, over 66.90%, down from its all-time high when it crossed $4,891.70 in November 2021.