US-based financial services firm Robinhood is trimming its workforce by 23%, citing deteriorating macro environment.
While the decision will impact all functions, the redundancies will particularly happen in operations, marketing, and programme management functions.
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In April, Robinhood announced that it will let go 9% of its staff to focus on cost discipline, but the layoffs did not go far enough, said Robinhood CEO Vlad Tenev.
The latest layoffs will impact 780 employees.
Tenev explained: “Since that time, we have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody.”
Robinhood chief said that last year, they hired assuming that the heightened stock and crypto activity would persist into 2022.
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By GlobalData“In this new environment, we are operating with more staffing than appropriate. As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me,” Tenev added.
For the second quarter that ended on 30 June 2022, the firm posted a net revenue of $318m, was as against $565m a year ago.
The fintech will now be moving to a general manager (GM) structure, where GMs will have broad responsibility.
The move is aimed at flattening hierarchies, reducing cross-functional dependencies and axing redundant roles.
The layoffs come as the New York state’s Department of Financial Services (DFS) announced a $30m penalty on the crypto arm of Robinhood.
The DFS said that Robinhood Crypto failed in the areas of bank secrecy act/anti-money laundering (BSA/AML), cybersecurity and consumer protection.
