On June 26, Robinhood Markets said it was cutting about 7% or 150 of its full-time employees. The move comes as the firm struggles with reduced customer engagement. It stated:
“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,”
It is not the first time Robinhood has slashed staff, as a 23% cut was made in August 2022, and a total of 1,000 employees were laid off last year.
Robinhood Interest Wanes
The firm surged in popularity during the pandemic and lockdowns when a largely millennial customer base flocked to trade meme stocks and crypto. It boasted more than 21 million monthly active users during Q1 2021, its best-performing quarter.
However, by May 2023, that figure had halved to around 11 million monthly active users. Furthermore, revenue from transaction fees dropped 5% in Q1, 2023, year-on-year and was half of that in Q1, 2021
The latest batch of layoffs affected roles in customer experience, and platform shared services, customer trust and safety, and productivity, reported the WSJ.
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This latest round of layoffs came less than a week after Robinhood agreed to acquire credit-card startup X1 in a cash deal worth $95 million.
The firm is seeking to diversify after delisting several digital assets this month in the wake of the regulatory attack on the industry.
According to Forbes, Robinhood is not the only large finance firm slashing staff this year.
Goldman Sachs is reportedly cutting 125 managing directors in its latest round of job cuts over the past 12 months. Additionally, big-four accounting firm KPMG laid out plans to slash 5% of its workforce, it reported.
US crypto and Tech Layoffs Continue
According to Layoffs Tracker, payments platform Payoneer axed 10% of its workforce, or 200 people, this week. The firm, which went public in June 2021, has been facing headwinds in recent months due to the macroeconomic situation.
On June 14, Bitwise laid off all of its 900 employees and Binance.US has been letting staff go this month amid a crackdown from the U.S. Securities and Exchange Commission.
Additionally, crypto tax software startup Taxbit cut almost 40% of its staff earlier this month as the war on crypto continues to cripple American companies.
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