Robinhood cuts 23% of employees, CEO Vlad Tenev says, ‘That is on me’ – TechCrunch

It’s been a unstable 12 months for retail funding behemoth Robinhood. The fintech firm is shedding 23% of its workforce, as first reported by the Wall Avenue Journal and confirmed by TechCrunch. The layoff comes simply three months after Robinhood minimize 9% of full-time employees.

On the time of its final layoffs in late April, it’s believed that Robinhood had about 3,100 workers after letting go of round 300 employees. Doing the maths, a 23% discount in employees would quantity to about 713 workers affected, leaving roughly 2,400 workers at present employed on the firm

The corporate didn’t remark straight on the newest layoffs, pointing TechCrunch solely to a weblog publish by CEO and co-founder Vlad Tenev. In that publish, Tenev wrote that whereas “workers from all features could be impacted, the layoffs are “notably concentrated” within the firm’s operations, advertising and program administration features.

Within the publish, Tenev took duty for Robinhood’s obvious overhiring within the frenzy that was 2021. He stated that the corporate final 12 months staffed lots of its operations features beneath the belief that the “heightened retail engagement” that was happening would proceed in 2022.

“On this new setting, we’re working with extra staffing than acceptable,” he wrote. “As CEO, I accredited and took duty for our bold staffing trajectory — that is on me.”

Tenev additionally addressed that its earlier spherical of layoffs “didn’t go far sufficient.”

“Since that point, we have now seen extra deterioration of the macro setting with inflation at 40-year highs accompanied by a broad crypto market crash. This has additional lowered buyer buying and selling exercise and property beneath custody,” he wrote. Robinhood just isn’t alone in its option to conduct two rounds of layoffs in a brief time period; simply seven weeks after crypto trade Gemini minimize roughly 10% of its workforce, the corporate minimize one other 7% of employees, in line with sources.

Robinhood additionally at the moment launched its second quarter financials, revealing a 6% improve in web income of $318 million on a web lack of $295 million or 34 cents per diluted share. That loss was narrower than its web lack of $392 million, or 45 cents per share, within the first quarter of 2022.

Transaction-based income was down 7% to $202 million whereas cryptocurrencies elevated 7% sequentially to $58 million.

Robinhood additionally included working bills related to severance and restructuring, saying that bills shall be $17 million in reference to the April restructuring and an estimated $45 million to $60 million with the August restructuring. In 2022, whole working bills are nonetheless anticipated to be down between 7% to 10% from the prior 12 months, Robinhood claims.

Robinhood’s inventory worth has been unstable over the previous 12 months, as properly. On the time of publication, the corporate is buying and selling at $8.90 after hours, dramatically decrease — by 89% — than its 52-week excessive of $85. It’s additionally down 3.6% after hours.

Earlier at the moment, the WSJ wrote that Robinhood was slapped with a $30 million high quality by a New York monetary regulator, particularly on its cryptocurrency buying and selling arm.

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