Robinhood lays off practically 1 / 4 of its workforce amid crypto winter

by Cryptospacey

Fee-free inventory, choices, and cryptocurrency buying and selling platform Robinhood is getting rid of 23% of its workforce resulting from dipping revenues and a crypto bear market.

Firm CEO blames woes on rising inflation

Vlad Tenev, chief govt for Robinhood, highlighted his plan to scale back 23 % of the corporate’s workforce throughout a gathering earlier this week. The downsizing comes at a time when the corporate had already slimmed down its personnel rely by 9 % again in April.

In Tenev’s view, Robinhood has been overstaffed since 2021 resulting from rising investor curiosity in crypto and inventory buying and selling. By the primary quarter of 2022, the corporate had elevated its power by roughly 700 individuals, bringing its whole variety of workers to three,900. The back-to-back firings will have an effect on 1,100 people related to the corporate’s varied inner operations, together with advertising and program administration.

The CEO believes that rising inflation, which is at the moment at 9.1% and falling digital asset costs have pressured the agency to reassess its monetary methods and restructure its workforce. He additionally blamed Wall Avenue for the choice, including that the inventory market’s latest six-month stretch, which is the worst in over 50 years, has resulted in lowered commerce exercise on the app.

Robinhood’s progress numbers have been dwindling

Robinhood’s income is down 44 % to $318 million over the second quarter of 2022 as in comparison with the $565 million reported throughout the identical three-month stretch final yr. Commenting on the agency’s ongoing decline, Dennis Kelleher, co-founder of Higher Markets, a nonprofit that advocates for monetary reform, said:

“Robinhood is exclusive in some methods for having the proper mixture of a profitable predatory enterprise mannequin at a time when retail buyers’ urge for food for taking part within the markets was at an all-time excessive,”

Equally, Robinhood’s second-quarter earnings present that the agency has reduce down on its advertising bills by 74 % whereas growing its spending on expertise and growth by 56 %. Additionally, throughout its peak final yr, the agency boasted of an lively buyer base of 18.9 million lively customers. This quantity has come right down to 14 million as of June 2022.

Lastly, with fears of a looming recession, a rising variety of tech corporations have been readjusting their hiring methods. Over the previous few months, outstanding crypto entities, together with Coinbase, BlockFi, and Gemini, have needed to fireplace 1000’s of their workers.

The corporate’s future seems bleak

On July 2, Robinhood’s cryptocurrency division was slapped with a superb price $30 million by the New York State Division of Monetary Providers resulting from points with its transaction monitoring system and total safety framework.

Equally, the corporate got here underneath the scanner late final yr when it froze all trades associated to GameStop shares, citing the safety of its purchasers’ funds. Because of this, the corporate was investigated by the  U.S. Securities and Alternate Fee.

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