Robinhood cuts 23% of staff, CEO Vlad Tenev says: ‘This is mine’ – MovieUpdates

It’s been a fleeting year for retail investment giant Robinhood. The fintech company is laying off 23% of its staff, as first reported by the Wall Street Journal and confirmed by MovieUpdates. The layoff comes just three months after Robinhood laid off 9% of its full-time workforce.

At the time of the last layoffs in late April, Robinhood reportedly had about 3,100 employees after letting go of about 300 employees. Taking into account, a 23% workforce reduction would equate to approximately 713 affected employees, leaving approximately 2,400 employees at the company currently

The company did not comment directly on the latest layoffs, pointing MovieUpdates only to a blog post from CEO and co-founder Vlad Tenev. In that post, Tenev wrote that while “employees from all positions would be affected, the layoffs” are mainly concentrated in the company’s operations, marketing and program management.

In the position, Tenev took responsibility for Robinhood’s apparent overcrowding in the 2021 frenzy. He said the company held many of its operational functions last year under the assumption that the “increased retail engagement” that took place in 2022 would continue. .

“In this new environment, we are working with more staff than necessary,” he wrote. “As CEO, I have approved our ambitious personnel journey and taken responsibility – this is up to me.”

Tenev also said his previous round of layoffs “didn’t go far enough”.

“Since that time, we have seen a further deterioration in the macro environment with inflation at its 40-year high, accompanied by a broad crypto market crash. This has further reduced the trading activity of clients and assets in custody,” he wrote. Robinhood isn’t alone in choosing to make two rounds of layoffs in a short space of time; just seven weeks after crypto exchange Gemini cut about 10% of its workforce, the company cut another 7% of its workforce, according to sources.

Robinhood also released its second quarter financials today, showing a 6% increase in net sales from $318 million on a net loss of $295 million or 34 cents per diluted share. That loss was smaller than the net loss of $392 million, or 45 cents per share, in the first quarter of 2022.

Transaction-based revenue fell 7% to $202 million, while cryptocurrencies rose 7% consecutively to $58 million.

Robinhood also included operating expenses related to departures and restructuring, saying costs will be $17 million related to the April restructuring and an estimated $45 million to $60 million with the August restructuring. In 2022, total operating expenses are still expected to be between 7% and 10% lower than in the previous year, Robinhood claims.

Robinhood’s stock price has also been volatile over the past year. At the time of publication, the company is trading at $8.90 after-hours, dramatically lower – at 89% – than its 52-week high of $85. It is also 3.6% lower after hours.

Earlier today, the WSJ reported that Robinhood was fined $30 million by a New York financial regulator, specifically on its cryptocurrency trading arm.

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