Robinhood, the app that popularized free one-click buying and selling of shares and choices, stated on Tuesday that it was shedding roughly 340 individuals, or about 9 % of its 3,800 staff.
Vlad Tenev, Robinhood’s chief govt, stated in a blog post that the corporate had basically overhired within the pandemic. Since 2020, the corporate’s work power has grown virtually six instances, to three,800 individuals from 700, resulting in duplicate roles and job features and “extra layers and complexity than are optimum,” he stated.
Mr. Tenev added that “after fastidiously contemplating all these components, we decided that making these reductions to Robinhood’s workers is the proper choice to enhance effectivity, improve our velocity, and be certain that we’re conscious of the altering wants of our clients.”
He stated the corporate was robust financially, with $6 billion in money.
Robinhood didn’t instantly reply to a request for remark.
The Silicon Valley firm has lengthy attracted scrutiny for its commission-free one-click buying and selling, particularly of riskier property reminiscent of choices. It grew shortly and disrupted rivals, together with E-Commerce and different brokers, with its ease of use and lack of charges, however critics questioned whether or not it stoked unhealthy conduct, particularly amongst younger and unsophisticated particular person buyers.
In early 2021, Robinhood was caught up within the “meme” inventory frenzy, when teams of particular person buyers banded collectively to drive up the costs of some out-of-favor shares, together with GameStop. Many used Robinhood to make their trades.
Robinhood needed to halt some trades and lift rounds of emergency funding to cowl the collateral wanted for its clients’ trades. Mr. Tenev’s cellphone was seized by the authorities as a part of an investigation into the scenario. Robinhood was sued greater than 50 instances, and Mr. Tenev was summoned to testify in Congress.
The corporate went public in July 2021. It lost $3.69 billion last year, although income elevated 89 % to $1.82 billion.
