Robinhood, a trading platform that made a name for itself by allowing amateur investors to play the market, is forgiveness almost a quarter of its employees, citing economic conditions and the collapse of the cryptocurrency market.
The news that it was cutting 23% of its workforce came as the company’s revenue fell 44% due to declining trading activity. It’s a surprise earnings report that came a day ahead of schedule, sending the company’s stock down more than 3%. extended trade.
As part of the “reorganization,” the company will lay off about 23% of its workforce, CEO Vladimir Tenev said in a blog post. “Over the past year, we have worked across many of our operational functions under the assumption that increased retail exposure to equity and crypto markets in the Covid era will continue into 2022,” Tenev wrote.
“Since then, we have seen the macroeconomic environment deteriorate further, with inflation at a 40-year high, accompanied by a widespread collapse of the cryptocurrency market.”
Robinhood already cut 9% of its workforce in April, saying the company’s growth had led to duplication of some roles and job functions. Tenev said on Tuesday that those cuts were not deep enough.
“As CEO, I’ve endorsed and taken responsibility for our ambitious HR trajectory — it’s up to me,” Tenev said.
Robinhood’s easy-to-use interface has made it popular with young investors trading cryptocurrencies and stocks like GameStop Corp during the Covid-19 pandemic.
But the company’s revenue has declined as its customer base has been scared away by rising interest rates and decades of high inflation.
It’s not the only tech company to weather the downturn Meta, Netflix and others struggling to maintain their explosive growth in the pandemic era. Tesla revealed this in its recent quarterly earnings report was sold out 75% of its bitcoin shares, and Google implemented rent freeze. Has cryptocurrency exchange platforms Coinbase and BlockFi also fought during the cryptocurrency crash, laying off hundreds of employees.
On Tuesday, Robinhood announced a $318 million $565 million in net income in the second quarter, as income from trading stocks, options and cryptocurrencies more than halved from $565 million in the previous quarter. Robinhood’s number of active users also fell by about a third in 2022. in June was 14 million compared to 21.3 million. in 2021 in the second quarter.