The online retail broker blamed the economy for a decline in user
numbers and net revenue that fell 44% year-on-year, although revenue
from crypto rose moderately this quarter.
Online brokerage firm Robinhood will lay off nearly a quarter of its
employees, citing a continued deterioration of the macro environment and
a broad crypto market crash.
The bad
news came in a Tuesday blog post from co-founder and CEO Vlad Tenev, on
the same day the firm released tepid Q2 financial results and the New
York State Department of Financial Services announced a $30 million fine for the company’s crypto branch due to alleged Anti-Money Laundering, cybersecurity and consumer protection violations.
Tenev
wrote that the layoffs would impact all functions in the company,
particularly operations, marketing, and program management, with around
23% of the staff let go. The Financial Times estimated the number of employees impacted to be around 780.
"Departing
— zerohedge (@zerohedge) August 2, 2022
Robinhoodies will be offered the opportunity to remain employed with
Robinhood through October 1, 2022 and receive their regular pay and
benefits. They will also be offered job search assistance (including an
opt in Robinhood Alumni Talent Directory)."
Robinhood laid off 9% of its staff earlier
this year, but Tenev said the cuts “did not go far enough.” He pointed
to economic conditions and the collapse of the crypto market as factors
in the move, stating:
“This has further reduced customer trading activity and assets under custody.”
In
addition, the company had wrongly assumed the heightened engagement
seen during the beginning of the COVID-19 pandemic would continue. Tenev
wrote:
“As CEO, I approved and took responsibility for our ambitious staffing trajectory — this is on me.”
The company issued its quarterly financial results a day earlier than scheduled.
Results were disheartening, with $318 million in net revenue, down 44%
year-on-year, although up 6% over the last quarter. Net loss was $295
million, narrowed from a net loss of $502 million in Q2 2021.
Monthly
active users were down 1.9 million from last quarter to 14.0 million in
June, and assets under custody dropped 31% to $64.2 billion in that
time.
Revenue from cryptocurrency rose 7% quarter-on-quarter to $58 million, however.
Related: Robinhood makes significant strides in crypto business in Q1 despite falling revenue
Robinhood enjoyed a significant spike in share price in May after FTX founder and CEO Sam Bankman-Fried paid $650 million for a 7.6% stake in the company. Share prices fell more than 4% Tuesday in after-hours trading, according to the Financial Time.
source link : https://cointelegraph.com/news/this-is-on-me-robinhood-ceo-to-lay-off-23-of-staff-after-q2-loss
