Robinhood lays off nearly a quarter of its workforce amid crypto winter

Robinhood, a commission-free stocks, options, and cryptocurrency trading platform, extermination 23% of employees are down due to declining revenues and a cryptocurrency bear market.

Company CEO accuses rising inflation of problems

Robinhood CEO Vlad Tenev emphasized at a conference earlier this week that the company plans to cut 23% of its workforce. The cuts come at a time when the company had already cut its workforce by 9% in April.

In Teneff’s view, increasing investor interest in cryptocurrency and stock trading has caused Robinhood to overstaff since 2021. By the first quarter of 2022, the company will have about 700 people It has grown to a total of 3,900 employees. The streak of layoffs will affect her 1,100 individuals related to the company’s various internal operations, including marketing and program management.

The CEO believes that rising inflation, now at 9.1%, and falling digital asset prices have forced the company to reassess its financial strategy and reorganize its workforce. He also blamed Wall Street for the decision, adding that the stock market’s recent six-month gain was its worst in more than 50 years, and trading activity on the app declined.

Robinhood growth numbers are declining

Robinhood’s revenue fell 44% to $318 million in the second quarter of 2022, compared with $565 million reported for the same three months last year. Dennis Kelleher, co-founder of Better Markets, a nonprofit advocating for financial reform, said of the company’s continued decline:

“Robinhood is unique in some ways in that it has the perfect combination of a successful and predatory business model at a time when retail investors’ appetite for participation in the market has never been higher. “

Similarly, Robinhood’s second-quarter earnings showed the company cut marketing expenses by 74% and increased spending on technology and development by 56%. Also, at its peak last year, the company boasted an active customer base of 18.9 million active His users. This number has fallen to 14 million he as of June 2022.

Finally, fears of a looming recession are causing more and more tech companies to readjust their hiring strategies. Over the past few months, prominent crypto entities such as Coinbase, BlockFi and Gemini have had to lay off thousands of employees.

the future of the company is bleak

On July 2, Robinhood’s cryptocurrency division was fined $30 million by the New York State Department of Financial Services for problems with its transaction monitoring system and overall security framework.

Similarly, the company was hit by a scandal late last year when it froze all trading related to GameStop stock, citing protection of client funds. As a result, the company was investigated by the US Securities and Exchange Commission.