Robinhood to chop 23% of its workforce, income down 44%

The latest cuts, which will affect 780 workers, continue a mass free fall to the once rapid internet brokerage. In a separate event on Tuesday, New York State took on Menlo Park, California with a $30 million fine.
A blog article On the company’s website, Robinhood CEO Vlad Tenev said that a “deteriorating macro environment” — particularly decades of high inflation coupled with the cryptocurrency crash — has reduced the company’s clients’ trading activity and assets under custody.
Own second quarter earnings in the report, also released Tuesday, the company’s revenue was down 44% from a year ago. Robinhood Active Users in June decreased by more than 7 million, or 34 percent, and that assets under protection decreased by more than 37 billion. USD, or 37 percent compared to the second quarter of last year.
He added that the company’s personnel and operations approach was tailored to the continuity of the fast-growing cryptocurrency. boom pandemic era.

“Over the past year, we have worked across many of our operational functions under the assumption that increased retail exposure to the equity and crypto markets in the COVID era will continue into 2022,” Tenev wrote in a memo to employees. “In this new environment, we are working with more staff than necessary.

He added: “As CEO, I have endorsed and taken responsibility for our ambitious staffing trajectory – it is up to me.”

The layoffs will affect employees across all functions of the company, he said, with operations, marketing and program management responsibilities the hardest hit. The company planned to email all employees on Tuesday. email and Slack to report their status and resources if they were affected.

Separately on Tuesday, the New York State Department of Financial Services fined Robinhood’s cryptocurrency division $30 million for alleged violations of reporting requirements related to money laundering and cyber security regulations.

“As the business grew, Robinhood Crypto failed to invest the necessary resources and attention to create and maintain a culture of compliance, resulting in significant violations of the Department’s anti-money laundering and cybersecurity regulations,” said Adrienne A. Harris. The head of the department said in a statement.

Correction: An earlier version of this story misstated the percentage decline in assets held by Robinhood. In the second quarter, they decreased by 37%.

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