Robinhood to lay off 7% of staff after two rounds of layoffs.
Robinhood is planning to lay off some of its staff in an effort to reduce operational costs due to a decline in demand. Many of the current employees were hired during the Covid era to fill various roles. During this time, there was a high demand for cryptocurrency trading and other Robinhood services, resulting in a significant increase in the company’s monthly users.
Many people were able to focus on trading during the pandemic and had more money due to reduced spending and government stimulus checks, leading to an increased demand for Robinhood’s services and the need for more employees. As a result, the number of employees rose from 700 to around 3,800 between 2020 and 2021.
However, despite having a large customer base during the pandemic, Robinhood has struggled to retain many users, resulting in a significant decline in monthly active users.
Although a company spokesperson did not confirm or deny the layoff news, they stated that the company is working to ensure operational excellence and teams may make changes based on various factors.
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Robinhood Had Two Rounds of Layoffs in 2022
This is not the first time Robinhood is laying off staff. If the layoff is executed, it will be the third layoff within a year. In April 2022, the company laid off 9% of its workers, citing the need for efficiency and increased velocity. In August, the company laid off 23% of its staff, primarily in marketing and program management, to reduce costs amid inflation.
Most of the recent layoffs are a result of the hiring spree that took place between 2020 and 2021, which led to a drastic reduction in service users as people returned to their workplaces. The last two rounds of layoffs affected over 1,000 employees.
Robinhood recently acquired X1 Inc, a financial technology firm, for approximately $95 million to diversify its income streams.