Robinhood, an online brokerage platform, will cast off approximately one-fourth proportion of its staff while referring to a constant deterioration witnessed within the company’s macro environment as well as the general collapse of the crypto market.
The respective news was witnessed in a blog post published on Tuesday by Vlad Tenev (the CEO and co-founder of the company) on the same date when the slow financial findings of Q2 this year and a fine of up to $30M were declared by the New York State Department of Financial Services for the cybersecurity, customer protection, as well as anti-money laundering laws’ infringement by the crypto arm of Robinhood.
Robinhood Terminates 23% of Its Staff
Tenev mentioned that the entirety of the operations done by the venue would be influenced by the layoffs, especially marketing as well as program management-related activities, after the exclusion of 23% of the workers. According to the estimate of the Financial Times, the number of workers influenced by the move was nearly 780. A proportion of almost 9% out of the platform’s staff was laid off formerly this year, however, Tenev emphasized that the amount of the decrease was not enough to let Robinhood work conveniently.
He stated that the economic situation as well as the crash of the entire crypto market as a whole were the main factors that led to the respective harsh move of the company. He added that the trading operations by the consumers have been further reduced by this move. Apart from that, he disclosed that the platform did not rightly estimate the elevated engagement in the industry during the start of the COVID-19 pandemic.
Market Scenario Makes It Difficult for Robinhood to Stay on
In his words, the responsibility for their enthusiastic staffing route is on him after the approval that he gave to minimize the staff. The platform released its quarterly financial findings a day before the schedule. The results were disappointing as the net revenue was around just $318M, after getting 44% down year-on-year, despite increasing by 6% in the previous quarter. $295M was the amount of the net damage, decreased from the net damage of $502M witnessed in the 2nd quarter of 2021.
The number of monthly active consumers has dropped by 1.9 million in comparison with the recent quarter to 14.0, as of June. A decline of 31% has occurred in the case of assets under custody to $64.2B at the respective time. Nonetheless, a quarter-on-quarter increase of up to 7% has also taken place in the crypto revenue of the platform to $58M.