Online brokerage Robinhood will lay off practically 1 / 4 of its workers, citing a continued deterioration of the macro surroundings and a broad crypto market crash.
The dangerous information got here in a weblog submit on August 2 from cofounder and CEO Vlad Tenev, on the identical day it launched tepid Q2 monetary outcomes, whereas the New York Department of Financial Services introduced a $30 million effective for the corporate’s crypto department due to alleged anti-money laundering, cybersecurity, and shopper safety violations.
Tenev wrote that the layoffs would affect all features within the firm, significantly operations, advertising and marketing, and program administration, with round 23% of the staff let go. The Financial Times estimated the quantity of workers impacted to be round 780.
“Departing Robinhoodies will be offered the opportunity to remain employed with Robinhood through October 1, 2022 and receive their regular pay and benefits. They will also be offered job search assistance (including an opt in Robinhood Alumni Talent Directory).”
— zerohedge (@zerohedge) August 2, 2022
Robinhood laid off 9% of its staff earlier this yr, however Tenev mentioned the cuts “did not go far enough.” He pointed to economic conditions and the collapse of the crypto market as factors in the move.
“This has further reduced customer trading activity and assets under custody.”
In addition, the corporate had wrongly assumed the heightened engagement seen through the starting of the COVID-19 pandemic would proceed. Tenev wrote:
“As CEO, I approved and took responsibility for our ambitious staffing trajectory — this is on me.”
The firm issued its quarterly monetary outcomes a day sooner than scheduled. Results had been disheartening, with $318 million in internet income, down 44% year-on-year, though up 6% over the past quarter. Net loss was $295 million, narrowed from a internet loss of $502 million in Q2 2021.
Monthly energetic customers had been down 1.9 million from final quarter to 14.0 million in June, and property beneath custody dropped 31% to $64.2 billion in that point.
Revenue from cryptocurrency rose 7% quarter-on-quarter to $58 million, nonetheless.
Related: Robinhood makes vital strides in crypto enterprise in Q1 regardless of falling income
Robinhood loved a major spike in share value in May after FTX founder and CEO Sam Bankman-Fried paid $650 million for a 7.6% stake within the firm. Share costs fell greater than 4% Tuesday in after-hours buying and selling, in accordance to FT.