Robinhood fires almost one in four employees as Retail Investors leave the app.
Robinhood is an American company headquartered in California. The company provides financial services and is known for providing non-professional investors with the opportunity of commission-free trading of stocks, exchange-traded funds and cryptocurrencies (since 2018) through a mobile application. Bitcoin, Dogcoin, Ethereum and Litecoin are now available. According to information from open sources, in the fourth quarter of 2021, Robinhood's revenue amounted to $264 million. Net loss for the period amounted to $423 million.
The company has been on the market for about 10 years, but the peak of Robinhood's popularity can be considered to be during the coronavirus pandemic, since quarantines caused a boom in the field of first retail investments, when everyone was sitting at home. At the time the company recruited many employees to service growing demand.
About 23 percent of Robinhood Markets Inc.'s full-time employees are being laid off due to a dramatic decline in consumer trading activity. The layoffs mainly affect operational, marketing and program management departments.
Vlad Tenev, CEO and co-founder of Robinhood, announced the reduction of a quarter of the staff in a corporate blog on the website.
He wrote: “We have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash”.
Many large fintech and moneytech companies have started mass layoffs of employees recently. In June, the crypto trading platform Coinbase laid off more than 1000 employees because billionaire CEO Brian Armstrong was preparing for a “crypto winter”. In July, Compass, an American bitcoin mining business, laid off 15% of its workforce and cut executive salaries after “numerous setbacks and disappointments”.
In the second quarter of last year, Robinhood had more than 21 million active users. These people met in the app to trade fancy stocks, options and cryptocurrencies. In 2021, it began to be actively used by members of the Reddit community to disperse and collapse the shares of specially selected companies. Since the beginning of this year, the company's shares have fallen by 50%. What will happen next with RobinHood? We will observe.