Robinhood to chop 23% of its workforce, income sinks 44%

The most recent cuts, which is able to have an effect on 780 workers, continues an enormous freefall for the as soon as high-flying on-line brokerage. In a separate growth Tuesday, the state of New York hit the Menlo Park, California, agency with a $30 million nice.

In a weblog submit on the corporate’s web site, Robinhood CEO Vlad Tenev mentioned the “deterioration of the macro surroundings” — notably decades-high inflation coupled with a cryptocurrency crash — has lowered the corporate’s buyer buying and selling exercise and property beneath custody.

In its second-quarter earnings report, additionally launched Tuesday, the corporate confirmed a 44% drop in income from a yr in the past. Robinhood’s month-to-month energetic customers in June decreased by greater than 7 million, or 34%, and that property beneath custody have dropped by greater than $37 billion, or 37%, from the second quarter of final yr.

The corporate’s staffing and operations strategy, he added, was tailor-made for a continuation of the high-growth crypto growth of the pandemic period.

“Final yr, we staffed lots of our operations features beneath the idea that the heightened retail engagement we had been seeing with the inventory and crypto markets within the COVID period would persist into 2022,” Tenev wrote in a message to workers. “On this new surroundings, we’re working with extra staffing than applicable.”

He added: ” As CEO, I accepted and took duty for our bold staffing trajectory — that is on me.”

The layoffs will have an effect on workers throughout all features of the corporate, with operations, advertising and marketing and program administration positions being the toughest hit, he mentioned. The corporate deliberate to inform all workers by way of electronic mail and Slack on Tuesday with their standing in addition to assets in the event that they have been affected.

“As its enterprise grew, Robinhood Crypto failed to take a position the correct assets and a spotlight to develop and keep a tradition of compliance — a failure that resulted in important violations of the division’s anti-money laundering and cybersecurity laws,” Adrienne A. Harris, the division’s superintendent mentioned in a press release.

Correction: An earlier model of this story misstated the share decline in Robinhood’s property beneath custody. These fell by 37% within the second quarter.