Robinhood, the online brokerage firm, is undergoing its third wave of layoffs, resulting in a reduction of approximately 7% of its full-time employees. The decision comes as the company faces a decline in customer trading activity and follows the controversial delisting of three major cryptocurrencies. The Wall Street Journal originally reported these developments. In an internal message, the company stated that about 150 employees would be affected by the cut. According to CFO Jason Warnick, this action is aimed at “adjusting to volumes and better aligning team structures.”

Consequences and Employee Impact

Last year, Robinhood underwent a significant downsizing, eliminating over 1,000 jobs and leaving the company with roughly 2,300 full-time employees by the end of 2022. Following the layoffs, the firm experienced increased employee departures and reported declines in job satisfaction. The affected roles in this latest round of layoffs primarily include customer experience, platform shared services, customer trust and safety, and safety and productivity. However, Robinhood’s spokesperson emphasized the company’s commitment to operational excellence and acknowledged that changes may be necessary based on volume, workload, and organizational design.

Challenges and Acquisitions

Alongside the layoffs, Robinhood recently acquired credit-card startup X1 in a cash deal worth $95 million. This acquisition is part of the company’s ongoing strategy to expand beyond trading. However, Robinhood is currently grappling with a significant decline in monthly active users. In May, the platform had fewer than 11 million users, a substantial decrease from the peak of over 21 million users during the Covid-19 pandemic. Furthermore, the company’s transaction-based revenue for the first quarter dropped by 5% year over year and was more than halved compared to the first quarter of 2021.

Cryptocurrency Challenges and Market Impact

Robinhood is also facing challenges in the cryptocurrency market. Following a crackdown by the U.S. Securities and Exchange Commission (SEC), the company announced that it would delist Cardano (ADA), Polygon (MATIC), and Solana (SOL) on June 27. This decision was prompted by SEC lawsuits against Coinbase and Binance, which classified these tokens as unregistered securities. The delisting may further strain the firm’s crypto trading volumes, which experienced a 30% year-on-year decline in May. However, it is important to note that these issues are not unique to Robinhood, as the overall decrease in trading volumes is a result of the relatively stable crypto market.

Exchanges

Articles You May Like

CME Group to Launch Ether/Bitcoin Ratio Futures, Expanding Investment Opportunities
Ethereum Suffers Withdrawals as Institutional Investors Turn Their Backs
The Critical Juncture for Bitcoin: Will the Bearish Head-and-Shoulder Pattern Prevail?
BRICS Nations Developing Guidelines for Countries Interested in Joining Economic Bloc

Leave a Reply

Your email address will not be published. Required fields are marked *