Robinhood, the buying and selling app that popularized one-click buying and selling and helped gas final yr’s meme inventory frenzy, stated on Tuesday that it was shedding about 23 p.c of its work pressure.
Vlad Tenev, the chief govt of Robinhood, stated in a blog post that the layoffs would have an effect on workers throughout the corporate, particularly these in operations, advertising and program administration roles.
Robinhood declined to touch upon the layoffs.
The announcement adopted carefully on the heels of cuts in April, when Robinhood laid off 340 staff, or about 9 p.c of its workers on the time. Since then, Mr. Tenev wrote, additional worsening of the economic system, together with inflation and the crash of the crypto market, has “decreased buyer buying and selling exercise and belongings beneath custody.” The worth of Bitcoin has fallen by greater than half this yr, to about $23,000 per coin. The cryptocurrency rose as excessive as $66,000 in late 2021.
The layoffs come as a part of a wave of job cuts at tech corporations, together with some cryptocurrency companies. In June, cryptocurrency exchanges together with Coinbase and Gemini introduced that they had been shedding workers. Final week, Shopify, a web-based market, introduced it was chopping 10 p.c of its 10,000 workers.
In his memo on Tuesday, Mr. Tenev stated Robinhood misjudged the economic system and buying and selling exercise. “As C.E.O., I permitted and took duty for our bold staffing trajectory — that is on me,” he wrote.
The corporate additionally launched its second-quarter results on Tuesday, reporting that its month-to-month rely of lively customers declined to 14 million in June, a lower of 1.9 million.
The turbulence represents a serious comedown for Robinhood, which grew to become a key participant within the meme inventory craze in early 2021, when buyers banded collectively to drive up the shares of corporations together with the online game retailer GameStop and the movie show chain AMC. On Jan. 27, 2021, GameStop shares closed up almost 1,800 p.c from a couple of weeks earlier than, a file. Then, Robinhood restricted buying and selling in some meme shares. The restrictions led the shares to plunge. Lawsuits, a Securities and Trade Fee investigation and congressional hearings quickly adopted.
Robinhood’s inventory worth soared in the course of the meme-stock buying and selling. On Aug. 7, 2021, the corporate was value $46 billion, up about 60 p.c from its valuation per week earlier than. However its inventory has plunged 50 p.c because the starting of the yr because it continues to take care of the fallout.
The layoffs come at a difficult second for monetary know-how corporations.
Coinbase, the publicly traded cryptocurrency alternate, laid off 18 p.c of its workers in June amid the crypto market crash. Different main crypto corporations, like OpenSea, Gemini and Crypto.com, have additionally made job cuts.
“Everybody over-hired — Coinbase over-hired, Robinhood over-hired. When cash was straightforward, they had been simply hiring, hiring, hiring,” stated Dan Dolev, a senior analyst at Mizuho. “I’m not stunned to see these cuts.”
The general worth of the cryptocurrency market is all the way down to about $1 trillion from $3 trillion final yr, when enthusiasm for crypto buying and selling peaked and the worth of Bitcoin reached a brand new excessive.
Robinhood has been working to construct out its crypto arm this yr, itemizing new cash and rolling out a crypto pockets product. “The one factor that I favored the least about Robinhood is their crypto publicity,” Mr. Dolev stated. “Something that has no intrinsic worth is at all times vulnerable to issues.”
Additionally on Tuesday, the New York State Division of Monetary Companies introduced it was fining Robinhood’s crypto operation $30 million over violations of its anti-money laundering and cybersecurity laws.
“As its enterprise grew, Robinhood Crypto failed to speculate the right sources and a spotlight to develop and keep a tradition of compliance,” Adrienne A. Harris, the superintendent of monetary companies, stated in an announcement.
Cheryl Crumpton, affiliate normal counsel at Robinhood, stated in an announcement that the corporate was “happy” the settlement had been finalized. “We’ve made important progress constructing industry-leading authorized, compliance, and cybersecurity packages, and can proceed to prioritize this work to finest serve our clients,” she stated.
