Robinhood Lays Off 23% of Staff a Day Before Earnings Report

Analysts had predicted a decline in earnings prior to the layoff announcement

article-image

Source: Shutterstock

share

key takeaways

  • Laid off employees will have the option to stay until Oct. 1, 2022 with full pay and benefits
  • HOOD was trading about 4.5% lower in after-hours trading Tuesday

Robinhood has shed 23% of its staffers, the company said Tuesday — one day ahead of its second-quarter earnings call. 

The cuts are mostly concentrated to the operations, marketing, and program management teams, Robinhood CEO Vlad Tenev wrote in a blog post. The move comes shortly after the company announced a 9% reduction in headcount in April 2022, citing a decrease in growth. 

[stock_market_widget type=”accordion” template=”chart” color=”#7C2AD5″ assets=”HOOD” start_expanded=”true” display_currency_symbol=”true” api=”yf” chart_range=”6mo” chart_interval=”1wk”]

The impact on the company’s crypto trading business isn’t clear. A spokesperson for the division did not immediately return a request for comment. 

The initial round of cuts “did not go far enough,” Tenev wrote. 

Macro conditions and increasing inflation have contributed to decreased trading activity — leading to lower fee revenue — Tenev said. Additionally, the crypto market’s recent crash has negatively impacted trading volumes and related assets.

“Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022,” Tenev said. “In this new environment, we are operating with more staffing than appropriate.”

Laid off employees will receive an email and Slack message, the blog said. Departing staff will have the option to remain employed through Oct. 1, 2022 with full pay and benefits. 

Analysts had already estimated that Robinhood, which went public in 2021 after pioneering a zero-fee trading structure for equities, would miss Wall Street’s consensus growth metrics — before the layoffs were made public. 

The company’s stock traded about 4.5% lower in Tuesday’s after-hours session.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png

Research

With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.

article-image

Launching cryptocurrencies the old fashioned way may soon make a return

article-image

Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug

article-image

NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.

article-image

EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down