Online brokerage Robinhood is laying off nearly a quarter of its workforce, citing a continued deterioration in the macro environment and a broad crypto market meltdown.
This bad Co-founder and CEO Vlad Tenev posted a blog post on Aug. 2, the same day that tepid second-quarter financial results were released, while the New York Department of Financial Services announced A $30 million fine was imposed on the company’s crypto arm for alleged anti-money laundering, cybersecurity and consumer protection violations.
The layoffs will affect all of the company’s functions, especially operations, marketing and project management, Tenev wrote, with about 23% of employees to be laid off.Financial Times estimated The number of affected employees is approximately 780.
“Departing Robinhoodies will have the opportunity to remain employed by Robinhood until October 1, 2022, with their regular salary and benefits. They will also receive job search assistance (including selection from the Robinhood Alumni Talent Directory).”
– Zero Hedge (@zerohedge) August 2, 2022
Robinhood laid off 9% of its workforce earlier this year, but Tenev said the layoffs were “not enough.” He cited economic conditions and the collapse of the crypto market as factors in the move.
“This further reduces client trading activity and custody assets.”
Furthermore, the company wrongly believed that the high level of engagement seen in the early days of the COVID-19 pandemic would continue. Tenev wrote:
“As CEO, I approve and take responsibility for our ambitious staffing trajectory – it’s up to me.”
company release Its quarterly financial results come a day earlier ScheduledThe results were dismal, with net income of $318 million, down 44% year over year but up 6% sequentially. Net loss of $295 million narrowed from a net loss of $502 million in the second quarter of 2021.
Monthly active users fell 1.9 million to 14 million in June from the previous quarter, while assets under custody fell 31% to $64.2 billion over the same period.
However, revenue from cryptocurrencies rose 7% sequentially to $58 million.
Related: Robinhood makes big strides in first-quarter crypto business despite revenue drop
Shares of Robinhood surged in May after FTX founder and CEO Sam Bankman-Fried bought a 7.6% stake in the company for $650 million. Shares fell more than 4 percent in after-hours trading on Tuesday, according to the Financial Times.
