Robinhood, the app that popularized free one-click inventory and crypto buying and selling, revealed on Tuesday that it could lay off roughly 340 full-time workers, or round 9% of the three,800 workforce.
The transfer, based on Robinhood CEO Vlad Tenev, is in response to a decline in lively customers following a interval of fast progress early within the COVID-19 pandemic, which despatched the corporate’s worth tumbling about 72 p.c in six months.
Shares of the U.S. shopper investing and buying and selling service firm dropped 5% in prolonged buying and selling Tuesday after the corporate introduced the layoffs in a weblog put up.
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Robinhood Market Worth Down
Robinhood, which went public in July at a worth of $38, noticed its worth peak at $85 per share earlier than falling to a meager $10 per share.
In a weblog put up, Tenev mentioned:
“We determined that making these employee cutbacks is the best course of action for improving efficiency, increasing our velocity, and ensuring that we remain responsive to our clients’ evolving needs.”
Tenev mentioned the corporate will speed up its product momentum for the rest of the 12 months and can provide vital new merchandise spanning brokerage, cryptocurrency, spending, and saving.
The CEO said that Robinhood was “financially sound,” with $6 billion in money readily available.
Robinhood has lengthy been criticized for its commission-free one-click buying and selling, notably in relation to riskier merchandise corresponding to choices.
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The Silicon Valley startup grew quickly and upset rivals corresponding to E-Commerce and different brokers with its simplicity of use and lack of charges, however opponents questioned if it fostered an unhealthy follow, notably amongst younger and inexperienced particular person buyers.
Between 2019 and 2021, Robinhood elevated its employment base by roughly thrice, from 700 to over 3,800.
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Nonetheless, Tenev famous that the rising personnel generated redundant positions and added an unneeded layer of complexity, precipitating the current layoffs.
“While the choice to take this action was not easy, it is a calculated move to ensure we can continue delivering on our strategic objectives and advancing our mission to democratize finance,” Tenev defined.
On Thursday, Robinhood is slated to report its first-quarter earnings after the market’s shut. The weblog put up made no point out of these monetary findings, save to state that the corporate presently has greater than $6 billion in money readily available.
In the meantime, primarily based on the corporate’s monetary report, Robinhood’s lively consumer base has decreased from 18.8 million within the third quarter of final 12 months to 17.2 million in the newest quarter.
Featured picture from Yahoo Information, chart from TradingView.com