‘This is on me’ — Robinhood CEO to put off 23% of workers after Q2 loss

‘This is on me’ — Robinhood CEO to put off 23% of workers after Q2 loss

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On-line brokerage Robinhood will lay off practically 1 / 4 of its staff, citing a continued deterioration of the macro setting and a broad crypto market crash. 

The dangerous information got here in a weblog put up on August 2 from cofounder and CEO Vlad Tenev, on the identical day it launched tepid Q2 monetary outcomes, whereas the New York Division of Monetary Providers introduced a $30 million superb for the corporate’s crypto department on account of alleged anti-money laundering, cybersecurity, and client safety violations.

Tenev wrote that the layoffs would affect all capabilities within the firm, notably operations, advertising and marketing, and program administration, with round 23% of the workers let go. The Monetary Occasions estimated the variety of staff impacted to be round 780.

Robinhood laid off 9% of its workers earlier this yr, however Tenev mentioned the cuts “didn’t go far sufficient.” He pointed to financial circumstances and the collapse of the crypto market as components within the transfer.

“This has additional lowered buyer buying and selling exercise and property beneath custody.”

As well as, the corporate had wrongly assumed the heightened engagement seen through the starting of the COVID-19 pandemic would proceed. Tenev wrote:

“As CEO, I authorised and took accountability for our formidable staffing trajectory — that is on me.”

The corporate issued its quarterly monetary outcomes a day sooner than scheduled. Outcomes had been disheartening, with $318 million in internet income, down 44% year-on-year, though up 6% during the last quarter. Web loss was $295 million, narrowed from a internet lack of $502 million in Q2 2021.

Month-to-month energetic customers had been down 1.9 million from final quarter to 14.0 million in June, and property beneath custody dropped 31% to $64.2 billion in that point.

Income from cryptocurrency rose 7% quarter-on-quarter to $58 million, nevertheless.

Associated: Robinhood makes important strides in crypto enterprise in Q1 regardless of falling income

Robinhood loved a big spike in share worth in Might after FTX founder and CEO Sam Bankman-Fried paid $650 million for a 7.6% stake within the firm. Share costs fell greater than 4% Tuesday in after-hours buying and selling, in response to FT.