Due to excessive inflation and the decline of the cryptocurrency industry, Robinhood is laying off approximately a quarter of its workforce.
The corporation reported that the current economic climate had limited their trading activities, which had exploded during the height of the pandemic.
The move comes after the company announced quarterly revenues of $318 million (£260 million), down 44 percent from $565 million a year ago.
In April, the company eliminated 9 percent of its personnel, which CEO Vlad Tenev deemed insufficient.
Last year, we staffed many of our operational activities based on the expectation that the increased retail interaction with the stock and crypto markets that we observed during the Covid era would continue into 2022,” Mr. Tenev explained.
“In this new context, we are functioning with an excess of personnel. As chief executive officer, I approved and accepted responsibility for our aggressive staffing trajectory.”
The current round of layoffs will affect 780 employees, in addition to those announced earlier this year.
Mr. Tenev stated that all employees would receive “an email and a Slack message with their status, as well as resources and support if they are leaving.”
He said that workers, known as “Robinhoodies” at the California-based company, will be permitted to remain in their positions until 1 October, receive a severance package, and be assisted in their job hunt.
“We understand that this news is difficult for all Robinhoodians, and we are providing wellness help to those who desire it,” he said.
During the Covid lockdowns, novice traders flocked to Robinhood’s commission-free trading, causing the number of account holders to treble.
The growing cost of living and higher interest rates, which have impacted global markets and sent cryptocurrencies down, have however frightened its customer base.
Reuters stated that its monthly active users fell by about a third, from 21.3 million in the second quarter of 2021 to 14 million in June 2022.
The online brokerage’s purpose is to “democratize finance for all,” but it made news in January 2021 for blocking the purchase of shares in the US video game retailer GameStop, causing outrage among Americans who were attempting to drive up the price of the stock.
During a congressional hearing in the United States, Mr. Tenev apologized to consumers after lawmakers claimed the incident raised issues about the fairness of financial markets.
The platform has also been criticized for exposing novices to dangerous items, such as meme stocks and cryptocurrencies.
To achieve “better cost discipline,” the corporation announced it would restructure its organization such that general managers would assume “broad responsibility” for each of its operations.
Mr. Tenev stated that the modification would “flatten hierarchies” and “eliminate superfluous functions and positions.”
