- Due to declining customer engagement, Robinhood will fire about 7% of its full-time employees.
- The layoffs were implemented to better match team structures with volume.
In its third wave of layoffs in less than a year, online brokerage business Robinhood Markets is reportedly planning to fire about 150 full-time employees, or 7% of its whole workforce.
According to a Wall Street Journal publication, the stock and cryptocurrency trading platform Robinhood announced on Monday that it would fire 150 employees, or approximately 7% of its full-time staff, due to a decline in customer engagement.
The trading platform was essential during the epidemic’s retail trading frenzy, but its user base has deteriorated as commodity prices have risen. Robinhood informed:
“We’re ensuring operational excellence in how we work together on an ongoing basis. In some cases, this may mean teams make changes based on volume, workload,”
According to Chief Financial Officer Jason Warnick’s statement to the WSJ, the layoffs were implemented to better match team structures with volume.
The news comes a week after the company disclosed plans to pay about $95 million in cash for the financial technology startup X1 Inc. as it looks for new revenue sources to counteract the decline in its main trading area.
The months after the layoffs in April and August of last year, according to Robinhood’s most recent quarterly report, the company witnessed an uptick in personnel quitting on their own initiative and a decline in reported employee job satisfaction.
As of May, there were fewer than 11 million active Robinhood users each month. The first quarter’s transaction-based revenue decreased by 5% year over year and more than halved from the corresponding period in 2021. The US Federal Reserve’s swift rate increases bolstered the company’s interest income, allowing it to outperform Wall Street sales forecasts in the most recent quarter.
Last year, as profit margins shrank due to a fall in trading activity and muted prices of stocks and cryptocurrencies, Robinhood reduced its overall personnel by 9% in April and let go of 23% of its remaining employees in August. More than 1,000 employees were lost as a result of the two reductions. As of the end of 2022, Robinhood had more than 2,300 full-time employees, according to its annual report.
Coinbase and Robinhood have been asked to appear before Congress in May together with officials from the US Commodity Futures Trading Commission (CFTC). The testimony comes at a crucial moment when law enforcement is targeting cryptocurrency businesses.