It was flexible. Year for retail investment behemoth Robinhood. As first reported by the Wall Street Journal and confirmed by TechCrush, the fintech company is cutting 23% of its workforce. The layoffs come three months after Robinhood cut 9% of its full-time workforce.
At the time of the cuts at the end of April, Robinhood is believed to have had about 3,100 employees after laying off about 300 workers. Doing the math, the 23% reduction in staff will affect approximately 713 employees, currently approximately 2,400 employees will remain employed in the company.
The company did not directly comment on the latest layoffs, pointing only to a blog post by its CEO and co-founder, TechCrunch. Vlad Tenev. In that post, Tenev wrote that “employees from all functions will be affected, the layoffs are “particularly focused on the company’s operations, marketing and program management functions.”
In the post, Teneve took responsibility for the over-hiring of Robinhood, which will appear in 2021. 2022.
“We are operating with more manpower than is appropriate in this new environment,” he wrote. “As CEO, I’ve approved and taken responsibility for the direction of a major recruitment drive – that’s on me.”
The previous round of resignations “didn’t go far enough,” Tenev said.
“Since then, we’ve seen further deterioration of the macro environment, with 40-year high inflation and a broader crypto market crash. This has further reduced customer trading activity and assets under custody,” he wrote. It’s not alone; just seven weeks after crypto exchange Gemini cut roughly 10% of its workforce, the company has cut another 7%, sources said.
Robinhood announced second-quarter financials today, reporting net income of $318 million on a loss of $295 million, or 34 cents per diluted share, up 6 percent. That loss was less than a net loss of $392 million, or 45 cents per share, in the first quarter of 2022.
Trading-based revenue fell 7 percent to $202 million, while cryptocurrencies rose 7 percent sequentially to $58 million.
Robinhood also included operating expenses related to layoffs and restructuring, with costs estimated to be $17 million related to the April restructuring and $45 million to $60 million related to the August restructuring. In the year By 2022, total operating expenses are still expected to decline by 7% to 10% from last year, according to Robinhood.
Robinhood’s stock price has also been volatile over the past year. At the time of publication, the company is trading at $8.90 after hours, down 89% from its 52-week high of $85. It was down 3.6% after hours.
Earlier today, the WSJ wrote that Robinhood was hit with a $30 million fine by New York’s financial regulator, specifically for its cryptocurrency trading arm.