Popular online brokerage Robinhood Markets is reportedly planning to lay off about 150 full-time employees, equivalent to about 7% of its workforce, in a recently leaked internal announcement.
The move marks the company’s third wave of layoffs reflecting its continued adjustment to volatile market conditions.
Align with volume and team structure
According to inside information obtained by The Wall Street Journal, Chief Financial Officer Jason Warnick said the cuts were part of a plan to “adjust to volume and better align the team structure”. A company spokesman has yet to issue any statement confirming or denying the layoffs, but insists the company will continually strive for “operational excellence.”
The representative’s statement reads:
“We’re making sure we’re continuing to work together to achieve operational excellence. In some cases, that could mean team changes based on volume, workload, organizational design, etc.”
Possible Reaction to Recent Acquisitions and Falling Profits
The job cuts came five days ago, shortly after Robinhood acquired credit card company X1 for $95 million. It is worth noting that the company has already carried out two rounds of significant layoffs in 2022, with the total headcount reduced by 9% in April and another 23% in August.
The move is seen as a response to reduced trading activity and falling stock and cryptocurrency prices, both of which have squeezed the company’s profit margins significantly. In total, these layoffs resulted in the loss of more than 1,000 employees.
Three weeks ago, the company Due to the SEC subpoena.Later it continued to delist .
Declining user base and declining revenue
At its peak in the second quarter of 2021, Robinhood had 21.3 million active users and generated more than $565 million in revenue. However, recent financial data paints a less rosy picture.the company’s The data showed that the number of monthly active users dropped sharply by 44%, and revenue fell by 30% year-on-year.
Despite the turmoil, Robinhood stock has seen some positive moves, trading at $9.63 per share, up 18% year-to-date. However, that figure is down sharply from its all-time high in August 2021 and has fallen more than 82% since then.
The latest layoffs are The ever-changing dynamics in the fintech space are highlighted, illustrating the need for businesses to quickly adapt to changing market conditions.
Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.