Taking from the Rich, Kicking to the Curb: Robinhood App Lays off 9% of Staff

Robinhood’s band of merry males is quickly shrinking, because the funding app’s CEO introduced they had been shedding 9% of the corporate in a notice posted to the company’s website.

Robinhood CEO Vlad Tenev wrote that from 2020 by way of 2021, the corporate went by way of a interval of “hyper growth” on account of low rates of interest and financial stimulus.

“We grew net funded accounts from 5M to 22M and revenue from approximately $278 million in 2019 to over $1.8 billion in 2021,” Tenev wrote in his publish. “To meet customer and market demands, we grew our headcount almost six times from 700 to nearly 3,800 in that time period.”

That fast improve in workers led to “some duplicate roles and job functions, and more layers and complexity than are optimal,” in response to Tenev.

The firm CEO stated they presently have $6 billion within the financial institution, and so they nonetheless count on to develop its brokerage, crypto, and spending/saving companies. Yet the corporate’s shares are at an all-time low, even earlier than the corporate introduced its mass layoffs. Robinhood stocks closed at $10 a share on Tuesday, versus what it initially began at with $38 a share when the corporate went public in July final 12 months.

Many different firms within the crypto market noticed shares fall precipitously on Tuesday. Crypto buying and selling app Coinbase’s stocks are additionally approach under their peak getting into this week, and so they have apparently been having a rough time all through this year.

Nearly one in 10 workers will likely be let go along with this motion, equaling roughly 340 workers, based mostly on the overall variety of workers Tenev cited in his weblog publish. The CEO promised separation packages, healthcare, and job search help for the departing workers.

The app only recently introduced it could be permitting even more types of crypto assets to be offered on its platform, but that doesn’t appear to have corked the outlet of each falling income and misplaced customers. CNBC reported Robinhood’s day by day customers had been right down to 17.3 million from 18.9 million within the final quarter of 2021.

But the falling inventory worth belies many different challenges for the app. The app got here below hearth from each merchants and some politicians (AKA the Sheriff of Nottingham) for curbing so-called “meme stocks” buying and selling of Gamestop shares in early 2021. The firm was pressured to pay a kind of laytraders $30,000 for limiting his capability to commerce.

Users’ FTC complaints obtained by Gizmodo earlier this 12 months give a way that there’s a bunch of unresolved points which can be driving customers away. Customers had been reportedly unable to withdraw funds from their accounts. Other customers reported their accounts had been hacked, however they obtained little-to-no assist from the corporate. Users additionally complained concerning the restricted availability of tech help on Robinhood’s finish. The app didn’t introduce a telephone help system till October of 2021.

The firm responded to that article on the FTC complaints saying they had been “committed to supporting our customers and offering a safe experience, and we’re confident that the steps we’ve taken over the past two years put us in a strong position to serve our growing customer base.”

Yet time will inform if the townspeople appear inclined to imagine the bandit king’s golden-pronged phrases.