Robinhood Lays Off 23% Staff, Over 780 People Might Be Affected
- Robinhood, an American financial services company headquartered in California, has laid off 23% of its staff and, as per the Financial Times, over 780 people have been affected
- Furthermore, in April, Robinhood decided to let go of 9% of its workforce and focus on greater cost discipline throughout the organization
Crypto exchange platform Robinhood, which joined the list of companies troubled by the current market conditions laying off their employees, has intensified its employee layoff process.
According to a recent message from the company’s co-founder and CEO, Vlad Tenev, to the Robinhood community, the company has decided to reduce its headcount by around 23%, impacting employees from all functions but mostly concentrating on operations, marketing, and program management functions.
Notably, in April, Robinhood decided to let go of 9% of its workforce and focus on greater cost discipline throughout the organization. But Tenev said that this wasn’t enough for the company.
“Since that time, we have seen the additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody,”he stated.
After letting go of roughly 300 people, it is estimated that Robinhood had about 3,100 employees at the time of its previous layoffs. According to the calculations, a 23 % staff decrease would affect about 713 employees, leaving the company with about 2,400 workers.
In the post, Tenev said that the company over-hired employees in 2021 under the assumption that last year’s growing retail engagement would persist into 2022.
“As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me,”he wrote.
Employees leaving Robinhood will have the option to continue working for the exchange through October 1, 2022, receiving their usual pay and benefits (including equity vesting). Additionally, they will be given cash severance, support with job searching, and payment of COBRA medical, dental, and vision insurance payments.
Moreover, the co-founder revealed that the company would undergo a broader company reorganization into a General Manager (GM) structure, where GMs would be in charge of broad responsibilities for their individual businesses. Flattening hierarchies, lowering cross-functional dependencies, and eliminating redundant roles and positions are all benefits of this transformation, according to the company.
The layoff news coincides with the company’s Q2 financial report, which wasn’t very pleasing either. Robinhood reveals that the transaction-based revenue was down by 7% to $202 million, while cryptocurrencies increased 7% to $58 million. However, the company reported a 6% rise in net revenue of $318 million on a net loss of $295 million, or 34 cents per share. This loss was less than the first quarter’s net loss of $392 million, or 45 cents per share.
The troubles are not coming to an end for the exchange. The New York Department of Financial Services recently slapped Robinhood with a $30 million fine for alleged fraud and consumer protection law violations, as BitcoinWisdom reported.