Robinhood to Reduce its Workforce by 23%, Citing Broad Crypto Market Crash

The Co-Founder and CEO of Robinhood – Vlad Tenev – said the company will lay off approximately 23% of its staff due to the adverse ongoing macroeconomic conditions, including the record inflation in the US and the meltdown of the cryptocurrency sector.

Those events have reduced customer trading activity and assets under custody. Robinhood’s quarterly results showed that the firm’s revenue for Q2, 2022 was $318 million vs. $321 million estimated. The figures are also far from the $565 million reached in Q2 last year.

On a Dismissal Spree

The California-based investing and trading platform – Robinhood – was among the entities in the crypto world that had to lay off some of their staff this year because of the bear market and the subsequent adverse consequences. In April, the firm let go of 9% of its full-time employees.

Despite the brief price spikes, the following months continued to be rather disappointing for the digital asset market. This decline, combined with the surging inflation that reigns in the States, caused a financial drawback for Robinhood and another redundancy process. In a recent announcement, CEO Vlad Tenev explained that almost every fourth employee will have to be dismissed:

“I just announced that we are reducing our headcount by approximately 23%. While employees from all functions will be impacted, the changes are particularly concentrated in our operations, marketing, and program management functions.”

Tenev outlined that each departing member of the organization will remain employed until October 1, 2022. After that, they will receive regular pay and benefits (including equity vesting). The company will also provide cash severance, dental and vision insurance premiums, payment of COBRA medical, and assistance when looking for other job opportunities.

“We know that this news is tough for all Robinhoodies, and we are also offering wellness support to those who would like it,” Tenev added.

Disappointing Q2 Results

Proof of Robinhood’s financial slump is the recently disclosed quarterly results. The firm’s total net revenue of $318 million was up from the $299 million in Q1, but it could not hit the estimated $321. In addition, it is significantly less than the $565 million generated in the second quarter of 2021.

It is worth noting that back then, the company’s profits were fueled mainly by the huge interest in memecoins. In Q2, 2022, Dogecoin (DOGE) accounted for 62% of Robinhood’s crypto revenue.

Interestingly, the unsatisfying figures and the dismissal news did not have a negative effect on the organization’s public shares. Currently, HOOD trades at around $9.20, which is 2% more than yesterday’s numbers.

In comparison, the last time Robinhood revealed the layoff of 9% of its staff, the stocks plunged significantly.