Robinhood Markets announced Tuesday plans to render another 23% of its workforce jobless – just months after the app-based brokerage let go of 9% of its employees.
On Tuesday, Robinhood said it was laying off 780 employees and also announced the departure of a key executive.
The job cuts were concentrated in marketing, operations and program management functions, chief executive officer Vlad Tenev said in a statement.
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Crypto Collapse Among Factors That Led Robinhood To Fire StaffAccording to Tenev, “deterioration of the macro environment, with inflation registering 40-year peaks accompanied by a wide crypto market collapse” is the impetus behind the layoffs.
The latest terminations represent a continuation of the once-thriving online brokerage’s rapid decline.
In another development, the state of New York slapped the Menlo Park, California-based company with a $30 million fine for alleged violation of anti-money laundering and cybersecurity disclosure requirements.
Image: Business Upside Second Batch Of Terminations Since AprilRobinhood had previously ended the employment contracts of 9% of its staff in April. “I want to acknowledge how unsettling these types of changes are,” Tenev said.
In July of last year, Robinhood’s initial public offering (IPO) was fueled by a pandemic trading surge. The company’s monthly active users on its app dropped precipitously, and its stock plummeted.
During the COVID-19-triggered crisis, the company’s user-friendly interface made it popular among young investors trading cryptocurrencies and stocks such as GameStop Corp. from home.
CEO Takes Blame For Robinhood’s FreefallTenev stated that they thought that the market circumstances they observed in 2020 and 2021 would persist for a longer period of time than they did, and he was solely to blame when everything broke apart. “This is on me,” he admitted.
The CEO also pointed out that “the reality of it was they over-hired, in particular in some of these support functions.”
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Robinhood CEO Vlad Tenev. Image: Guest of GuestThe business is now confronting a new reality: its growth is reversing as the retail boom appears to lose pace.
CNBC reported on Tuesday that shares of Robinhood, which have lost more than 75 percent of their value since their IPO, concluded the day at $9.23 a share, down nearly 50 percent year to date.
The company’s shares fell around 2% during extended trading, the report added.
In a separate filing on Tuesday, Robinhood announced the departure of its chief product officer, Aparna Chennapragada, and the shutdown of two offices.
It’s estimated that severance and benefits will cost the firm $30 to $40 million, and that the office closures will cost the company anything from $15,000 to $20,000 in lost revenue.
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