Along with cuts announced in April, Robinhood has slashed more than 1,000 jobs from the company.
Photo: BRENDAN MCDERMID/REUTERS
Robinhood Markets Inc.
is slashing about 23% of its staff as the flashy online brokerage continues to reel from a sharp slowdown in customer trading activity.
The job cuts mark the second round of layoffs this year at Robinhood, which in April laid off about 9% of its full-time employees. Together, the two rounds have cut more than 1,000 jobs from the company.
The layoffs come alongside a broader company reorganization,
the company’s chief executive, said in a message posted to the company’s blog. In the statement, Mr. Tenev said the previous round of layoffs in April “did not go far enough” in helping the company cut costs.
“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,” Mr. Tenev said in the message. “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.”
Launched less than a decade ago, Robinhood ushered in a free-stock trading phenomenon during the Covid-19 pandemic, thanks to its easy-to-use, mobile-first online brokerage platform. By the second quarter of last year—Robinhood’s best, according to public filings—the company boasted more than 21 million active users, who flocked to the app to trade flashy meme stocks, options and cryptocurrencies.
But the pandemic-darling has seen its fortunes unwind this year as markets have tumbled and customers are no longer stuck at home like they were during the Covid-19 pandemic. For the three months ended March, Robinhood reported nearly 16 million active users, a 25% drop from last year’s peak. Revenue fell even faster, down 47%.
Its stock price, meanwhile, has plunged nearly 50% this year.
Robinhood scaled up staffing quickly during the Covid-19 pandemic to meet the surge in demand for its services. On the company’s earnings call in April, Mr. Tenev said the company grew its head count to nearly 3,900 in the first quarter of this year from roughly 700 at the end of 2019.
In his message Tuesday, Mr. Tenev said the new round of changes at the company are particularly concentrated in its operations, marketing and program management departments.
A number of technology companies have laid off employees in recent months as they grapple with a slowdown in growth and the threat of a looming recession.
are among those that have made staff cuts.
In addition to slowing growth, Robinhood has found itself under the watchful eye of regulators. The New York State Department of Financial Services said Tuesday that it imposed a $30 million fine on Robinhood’s cryptocurrency trading unit for alleged violations of anti-money-laundering and cybersecurity regulations.
The company, meanwhile, has encountered questions about the future viability of part of its business model, after Securities and Exchange Commission Chairman
earlier this year outlined a revamp of trading rules that could threaten one of the key ways Robinhood makes money.
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