Robinhood announces 23% staff cuts

by in Cryptocurrency News

Robinhood

Online broker Robinhood will reduce its headcount by approximately 23% amid a deteriorating macroeconomic environment and negative developments in the cryptocurrency market. This is stated in a letter from the CEO of the company, Vlad Tenev.

“In these new conditions, we are working with more staff than necessary. As CEO, I have endorsed and taken responsibility for our ambitious talent trajectory,” said the head of Robinhood.

According to him, layoffs will affect employees in all departments. According to the Financial Times, about 780 people will be out of work.

Tenev also announced adjustments to the online broker's organizational structure. The changes should "smooth out the hierarchy" and remove "redundant roles and titles".

“Departing will be allowed to remain at Robinhood until October 1, 2022, and receive regular pay and benefits,” the letter said.

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The CEO of the company promised the laid-off employees severance pay, payment of insurance premiums, and help in finding a new job.

On Aug. 2, Robinhood released its second-quarter financial report, which showed monthly user numbers fell from 1.9 million to 14 million. Operating expenses fell 12% to $610 million.

The firm's net income was $318 million, up 6% from the first quarter. However, compared to April-June 2021, the indicator fell by 44%. Loss per share was $0.34.

“Although the decision to further reduce staff was difficult, we believe that it is the right one and allows us to fulfill the mission of democratizing finance,” Tenev said.

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Shares of the online broker closed the trading session on August 2, up 2.1% to $9.23. In post-market quotes fell to $9.17.

In April, Robinhood laid off 9% of its employees amid a 75% drop in stocks after going public.

Against the background of the crisis, many representatives of the cryptocurrency industry announced optimization. In particular, BitMEX, Bitso, Mercado Bitcoin, Coinbase, BlockFi, and Crypto.com took this step.

In July, the media learned about the second wave of cuts in the Gemini bitcoin exchange. The decision to cut staff was made by Bitpanda, the mining company Compass Mining, and the OpenSea NFT marketplace.