In the latest round of layoffs, online brokerage firm Robinhood Markets is set to axe approximately 150 full-time employees, accounting for 7% of its workforce. This marks the third wave of job cuts in just over a year.
According to an internal message obtained by The Wall Street Journal, Robinhood’s Chief Financial Officer, Jason Warnick, expressed that the reductions were necessary to “adjust to volumes and to better align team structures.”
While a Robinhood spokesperson neither confirmed nor denied the layoffs, they emphasized the company’s commitment to operational excellence and the need for teams to adapt based on factors such as workload, organizational design, and volume.
This news follows Robinhood’s recent acquisition of credit card firm X1 in a $95 million deal, which occurred a mere five days prior. In 2022, Robinhood downsized its workforce by 9% in April and an additional 23% in August due to decreased trading activity and lower equity and cryptocurrency prices, leading to reduced profit margins. These cuts amounted to a loss of over 1,000 employees.
During its peak in Q2 2021, Robinhood boasted over 21.3 million active users and generated more than $565 million in revenue. However, the firm’s recent performance has been disappointing, with a 44% decline in monthly active users and a 30% year-over-year drop in revenue reported in Q1 2023.
Despite the challenges faced, Robinhood’s shares are currently trading at $9.63, reflecting an 18% increase for the year, although they have fallen significantly by over 82% from their all-time high reached in August 2021.