Updated · May 20, 2022
Robinhood’s to Cut 9% of Employees, Shares Plummet
Updated · Apr 27, 2022
The company’s chief executive made the disclosure in a blog post on Tuesday.
Dropping Nearly One in Ten Workers
Retail trading firm Robinhood has said that it will cut back its employee levels by 9%. CEO Vlad Tenev cited a downturn in growth and “duplicate roles and job functions”.
The firm’s shares fell by more than 5% in extended trading after the news went out.
“We determined that making these reductions to Robinhood’s staff is the right decision to improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers,” Tenev wrote.
Lockdowns, low-interest rates, and fiscal stimulus accelerated Robinhood’s growth during the height of the pandemic. To compensate, the company grew its staff levels by nearly 600% from 700 to about 3,800.
“This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal,” he added.
Tenev pledged to retain and hire “exceptional talent in key roles”.
Robinhood presented an attractive option to investors with its elimination of transaction fees for trading stocks and ETFs. Its cryptocurrency platform Robinhood Crypto, which allows users to sell and buy digital coins, is similarly commission-free.
However, it suffered a post-lockdown downturn, posting net losses of $423 million for the last quarter of 2021. The brokerage firm will release its financial results for the first quarter on Thursday.
Robinhood will provide “significant support” to the laid-off staff, including:
- separation packages
- job search assistance
Daniel is an Economics grad who fell in love with tech. His love for books and reading pushed him into picking up the pen - and keyboard. Also a data analyst, he's taking that leap into data science and machine learning. When not writing or studying, chances are that you'll catch him watching football or face-deep in an epic fantasy novel.
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