Robinhood lays off 7% of its full-time workforce to better align team structures
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Robinhood will lay off around 150 employees due to consumer engagement. The layoffs were made to better align team structures. The company’s user base has decreased as commodity prices have risen.
The stock and cryptocurrency trading platform Robinhood announced on Monday that it will be laying off approximately 7% of its full-time workforce. This decision, which will see around 150 individuals lose their jobs, comes in response to a dip in customer engagement.
As a key player in the retail trading frenzy that unfolded during the pandemic, Robinhood saw a significant surge in user base. However, as commodity prices began to increase, the platform experienced a decline in its user base.
According to a statement from Robinhood’s Chief Financial Officer Jason Warnick, the decision was taken to better align team structures and react to changes in volume. “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,” he explained.
This announcement comes just a week after the company announced its acquisition of the financial technology startup X1 Inc for a sum of $95 million. This move can be seen as an attempt to find new revenue streams to balance the losses in its main trading segment.
Robinhood in 2022
Robinhood had more 2,300 full-time workers at the end of 2022, according to the company’s annual report. It also saw two waves of layoffs last year, which resulted in more than 1,000 employees losing their jobs.
The company’s recent quarterly report shows an uptick in voluntary worker departures and a drop in reported employee job satisfaction in the aftermath of the layoffs carried out in April and August 2022.
As of May 2023, Robinhood reported having less than 11 million monthly active users. The company’s transaction-based revenue fell 5% year on year in the first quarter, representing a decline of over 50% from the same period in 2021. Nevertheless, Robinhood managed to surpass Wall Street’s revenue projections in the most recent quarter, largely thanks to the quick rate rises implemented by the US Federal Reserve, which increased the company’s interest income.
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