Robinhood Plans To Lay Off 7% Of The Workforce In The Third Round Of Layoffs
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Online brokerage platform Robinhood Markets has announced plans to lay off around 150 full-time employees. The number is equal to 7% of the company’s total workforce. The recent development marks the third round of layoffs by the company in over one year.
Robinhood lays off another 7% of the workforce
These layoffs were confirmed in a report by the Wall Street Journal. The Chief Financial Officer at Robinhood, Jason Warnick, said that the employee layoffs were made to adjust to the volumes and to align with the team structures.
A spokesperson from the Robinhood exchange has neither denied nor confirmed these layoffs. However, the spokesperson said that the team could be forced to make changes to guarantee its operational excellence.
“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, org design, and more,” the spokesperson said.
In 2022, Robinhood trimmed its workforce severally. The trading platform dropped the total headcount by 9% in April. In August, it later announced it would reduce the number of staff by 23% amid a drop in trading activity on the platform and declining stock and cryptocurrency prices that reduced the profit margins.
Changes at the Robinhood exchange
The Robinhood exchange has been facing a notable drop in trading activity affecting its performance. When the exchange was at its peak during the second quarter of 2021, the exchange had 21.3 million active users, and it amassed over $565 million worth of revenue.
However, a similar trend has not been seen this year. During the first quarter of 2023, the number of monthly active users dropped by 44%, with the revenue declining by 30% compared to the same period last year.
The shares of Robinhood are currently trading at $9.94 after reporting a 3.22% gain over the last 24 hours. The shares have declined by over 82% from the all-time high that was created in August 2021.
The Robinhood exchange has taken new measures to grow its business portfolio through the acquisition of a credit card startup known as X1 in a $95M deal. The fintech company provides access to an income-based credit card that has integrated rewards. It further provides a free trial and credit cards that can only be used once.
The acquisition deal will be closed by the end of September. Robinhood also expects that the move was a crucial step to deepening its relationship with its existing customers. It will allow these customers to access credit card services.
The Robinhood trading platform has also been making changes to its crypto division as it seeks to comply with the tough regulatory framework that has been set up by the US Securities and Exchange Commission (SEC).
The exchange announced that it would remove three crypto tokens from the platform. Customers on the exchange will no longer be able to trade top tokens like Cardano, Polygon, and Solana from June 27.
