Robinhood, the trading platform known for allowing inexperienced stock investors to participate in the market, lay off nearly a quarter of its staff. This is due to economic conditions and the collapse of the cryptocurrency market.
The news of Robinhood laying off of 23% of its workforce came as the company reported a 44% drop in revenues due to poor trading activity. The CEO Vladimir Tenev said in a blog post, “Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the Covid era would persist into 2022.” Tenev added, “Since that time, we have seen additional deterioration of the macro environment, with inflation at 40 – year highs accompanied by a broad crypto market crash.”
In April, Robinhood was already is lay off mode of about 9% of its staff. It was due to duplicate roles and functions in the company. In this regard, Tenev said, “As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me.”
The popularity of the Robinhood platform came in part due to covid. Young investors began to trade crypto and stocks on the platform throughout the months of the pandemic.
However, the overall value has declined due to rising interest rates and decades-high inflation.
Meta and Netflix
Robinhood is not the first to lay off staff. Meta and Netflix, and various others are in the same spot financially. Tesla has mentioned they are selling 75% of their bitcoin holdings, and Google has put a stop to hiring workers. The crypto crash has also affected Coinbase and BlockFi, which have laid off many staff members.
According to a filing with the US Securities and Exchange Commission, Robinhood reported net revenues of $318 million for the second quarter. This was compared to a year ago when it stood at $565m a year. Robinhood’s monthly users appeared to have dropped roughly a third, to 14 million in June 2022, from 21.3 million in the second quarter of 2021.
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