Cryptocurrency- Stock-trading app Robinhood will lay off 23% of its workforce, it said Tuesday.
- The cuts primarily affect employees who work in operations, marketing, and program management.
Stock-trading app Robinhood will lay off 23% of its staff, the company announced Tuesday.
The cuts will primarily impact employees in Robinhood's operations, marketing, and program management departments, CEO Vlad Tenev said in a message to employees that was also posted on the company's blog.
It's the second round of layoffs for Robinhood in 2022. The company previously announced plans in April to lay off 9% of its workforce after growing too rapidly during the pandemic amid a boom in stock-trading interest.
At the time, Robinhood had around 3,900 employees. Tuesday's cuts are likely to affect more than 800 jobs based on those numbers.
In the message to employees, Tenev outlined the reasons behind Tuesday's cuts, writing that the earlier layoffs "did not go far enough" to bring down costs amid record inflation and the crypto market crash, which has reduced trading activity on the platform, he said.
"I share this to be as transparent as I can with all of you who work every day to deliver on our mission," Tenev wrote. "We will be parting ways with many incredibly talented people today in an extremely challenging macro environment, and I want to reduce the burden of this difficult transition as much as possible."
Shares of Robinhood fell as much as 4% in late trading Tuesday following the announcement.
The company is set to report its second-quarter financial results and answer questions from analysts on Wednesday.
Robinhood's growth skyrocketed during the pandemic, when many people had the time to devote to trading, plus the cash, thanks in part to government stimulus checks and fewer entertainment options.
But the company hasn't been able to sustain that momentum.
Monthly active users have been steadily declining the past three quarters, from 18.9 million in the third quarter of 2021 to 17.3 million in the fourth quarter to 15.9 million by March 2022. Revenue dropped 43% in the first quarter compared to the year prior as "customers became more cautious with their portfolios," Tenev said at the time.