It’s been a risky 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 Fintech. 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 staff after letting go of round 300 staff. Doing the maths, a 23% discount in employees would quantity to about 713 staff affected, leaving roughly 2,400 staff presently employed on the firm
The corporate didn’t remark straight on the most recent layoffs, pointing Fintech solely to a weblog submit by CEO and co-founder Vlad Tenev. In that submit, Tenev wrote that whereas “staff from all capabilities can be impacted, the layoffs are “significantly concentrated” within the firm’s operations, advertising and marketing and program administration capabilities.
Within the submit, Tenev took duty for Robinhood’s obvious overhiring within the frenzy that was 2021. He mentioned that the corporate final 12 months staffed lots of its operations capabilities below the idea 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 authorized and took duty for our formidable staffing trajectory — that is on me.”
Tenev additionally addressed that its earlier spherical of layoffs “didn’t go far sufficient.”
“Since that point, we’ve seen extra deterioration of the macro setting with inflation at 40-year highs accompanied by a broad crypto market crash. This has additional decreased buyer buying and selling exercise and belongings below custody,” he wrote. Robinhood shouldn’t be 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 accordance with sources.
Robinhood additionally at this time launched its second quarter financials, revealing a 6% enhance in internet income of $318 million on a internet lack of $295 million or 34 cents per diluted share. That loss was narrower than its internet 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 will likely 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 value has been risky over the previous 12 months, as nicely. 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 this time, 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.