Robinhood drops after the popular trading platform announces it is cutting 9% of staff after period of rapid growth

• Robinhood stock marked its lowest finish on Wednesday after the retail trading app said it's cutting hundreds of jobs.
• The company will let go of more than 300 workers after headcount swelled to around 3,800 from 700 between 2020 and 2021.

Shares of Robinhood on Wednesday logged their lowest closing price following plans by the trading platform to reduce its workforce and recalibrate after the pandemic fueled a boom in trading by amateur investors.

Stock in the company valued at nearly $9 billion ended down by 4.9% at $9.51. The company went public in July 2021 and closed its first trading session at $34.82.

Robinhood CEO and co-founder Vlad Tenev in a blog post late Tuesday said it would let go of approximately 9% of its full-time employees. He said its expanded its staff to around 3,800 from 700 between 2020 and 2021. The layoffs put the reductions at more than 300 workers.

"This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal," said Tenev in describing a period of "hyper-growth" accelerated by COVID lockdowns, low-interest rates, and economic stimulus checks sent to millions of Americans by the federal government.

News of the jobs cuts arrived before Robinhood released its first-quarter earnings report on Thursday. Analysts polled by FactSet expect the company to post a narrower per-share loss of $0.38 a share on a 32% revenue decline to $355 million from $522 million a year earlier.

The stock dropped right after the release of its fourth-quarter results in January as Robinhood forecast first-quarter revenue of "less than $340 million," which was lower than Wall Street's average projection of $448 million.