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, in accordance with 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 % 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 publish.
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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 publish, Tenev mentioned:
“We decided that making these worker cutbacks is one of the best plan of action for enhancing effectivity, growing our velocity, and making certain that we stay aware of our purchasers’ evolving wants.”
Tenev mentioned the corporate will speed up its product momentum for the rest of the yr and can supply important new merchandise spanning brokerage, cryptocurrency, spending, and saving.
The CEO said that Robinhood was “financially sound,” with $6 billion in money available.
Robinhood has lengthy been criticized for its commission-free one-click buying and selling, notably on the subject of riskier merchandise resembling choices.
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The Silicon Valley startup grew quickly and upset rivals resembling E-Commerce and different brokers with its simplicity of use and lack of charges, however opponents questioned if it fostered an unhealthy observe, notably amongst younger and inexperienced particular person traders.
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.
“Whereas the selection to take this motion was not straightforward, it’s a calculated transfer to make sure we are able to proceed delivering on our strategic targets 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 publish made no point out of these monetary findings, save to state that the corporate at present has greater than $6 billion in money available.
In the meantime, primarily based on the corporate’s monetary report, Robinhood’s lively person base has decreased from 18.8 million within the third quarter of final yr to 17.2 million in the latest quarter.
Featured picture from Yahoo Information, chart from TradingView.com