- Robinhood is making staff redundant to adjust to volumes
- 1,000 employees lost their jobs in the first two rounds of layoffs
- In the first quarter of 2023, there was a 30% y/y revenue drop
Fintech company Robinhood Markets will reportedly lay off 150 full-time employees, corresponding to 7% of its total workforce. This is the third layoff round in just over a year, Cointelegraph reported, citing an internal company message seen by The Wall Street Journal.
In the message, Robinhood CFO Jason Warnick commented the company was making staff redundant to “adjust to volumes” and improve team structure alignment.
Ensuring “operational excellence”
Without confirming or denying the news, a Robinhood spokesperson stated:
We’re ensuring operational excellence in how we work together on an ongoing basis. In some cases, this may mean teams make changes based on volume, workload, org design, and more.
More than 1,000 people affected by first two cuts
In April 2022, Robinhood reduced its staff by 9%. Another 23% were let go in August against the backdrop of a decline in trading activity, loss of value of equities and cryptocurrencies, and consequently lower profit. More than 1,000 employees lost their jobs in the first two rounds of layoffs.
30% revenue decline in a year
Last week, Robinhood bought X1, a credit card company, for $95 million in a move to diversify its business portfolio. The fintech platform’s results peaked in the second quarter of 2021, with over $565 million in revenue and 21.3 million active users.
Things are going south for the fintech firm, though. In the first quarter of this year, there was a 30% year-over-year revenue drop as well as a 44% decline in monthly active users.
Regulatory hurdles
At the end of February, Robinhood received an investigative subpoena from the US Securities and Exchange Commission. It involved the platform’s operations, crypto custody, and cryptocurrency listings, among other things. They received similar requests from the California Attorney General’s office about its coin listings, customer disclosures, and customer asset custody.
The FTX connection
As Bankless Times reported in January, the US Department of Justice (DOJ) seized Robinhood stock worth around $456 million based on its closing price at the time. Allegedly, it was owned by Sam Bankman-Fried and FTX co-founder Gary Wang.
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