Jordan Bevan
Robinhood CEO and Co-founder Vlad Tenev announced on Tuesday that the company has laid off 23% of its workforce as the 40-year high inflation and the crypto market crash resulted in lower number of users trading on the platform.
The news arrives months after the company laid off another 9% in April because of the declining number of users and increasing costs. ‘’This did not go far enough,’’ said Tenev in a blog post.
‘’Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022, said Robinhood CEO. ‘’In this new environment, we are operating with more staffing than appropriate. As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me.’’
He said the decision will impact employees from all functions, mainly in operations, marketing and program management teams. While the company didn’t close the exact number, TechCrunch estimates that nearly 713 employees have been laid off.
Robinhood also shared its second quarter financial results yesterday, reporting a 6% growth in net revenue which reached $318 million in Q2. Its transaction revenue was down 7% to $202 million and net loss was $295 million.
While the number of its monthly active users fell 1.9 million to 14 million, the average revenue per user grew $3 to $56 in the second quarter.
Also Read: Robinhood Revenue and Usage Statistics (2022)
In addition to Robinhood, a lot of tech titans recently announced either lay-offs or hiring freezes because of the economic slowdown, including Google, Meta, Twitter, Coinbase and Shopify.
The New York State Department of Financial Services announced yesterday that it has imposed a total of $30 million fine on the crypto unit of Robinhood for ‘’significant anti-money laundering’’ and ‘’cybersecurity & consumer protection violations’’.
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