Robinhood Cuts Nearly 23% Of The Workforce- Blaming The Cryptocurrency Crash!
Robinhood had recently made an announcement in which it said that they have decided to lay off 340 workers (9 percent of total Employees). Due to the crypto winter and worsening market conditions, this decision was taken.
There has also been less activity on their platform and fewer assets under their custody. Robinhood is a trading application that enables one-click cryptocurrency and stock trading for the customers.
Robinhood Cuts Nearly 23% Of The Workforce, Blaming The Cryptocurrency Crash
Recently Vlad Tenev (CEO at Robinhood) wrote a blog in which he discussed layoffs that would impact its employees across all the different departments, such as management, marketing, and operation teams. While Media asked about more details on Layoffs, Robinhood declined to comment.
The layoffs in the tech industry are quite common; in recent months, big tech giants like Shopify have announced a significant percentage of layoffs. With respect the Robinhood, Tenev had accepted that he misunderstood the trading activity and economy. Also, he stated that as a CEO, he took and approved the growing staffing trajectory, which is on him.
The second Quarter Results released earlier this work reported that 1.9 Million users have stopped using the Robinhood Platform. The crypto industry turbulence caused a major comedown for Investment and trading platforms like Robinhood. In early 2021, Robinhood was the key player when the meme stock craze happened, and investors went up to pile the stocks of Movie Theater chain AMC and Gamestop. In early 2021, Gamestop shares went up by approximately 1800 percent. At that time, robin hood restricted trading for some meme stocks.
During the meme-stock craze, Robinhood’s stock price went to a new all-time high, and the company worth reached USD 46 Billion (60 percent more than its valuation during that time). The Stock had plunged by 50 percent, but since the beginning of this year, it has continuously fallen, making layoffs the only choice.
It is not that Robinhood is the only company that laid off its employee, but there are quite a more financial companies that laid off employees amid the cryptocurrency downfall. Coinbase had laid off 18 percent of its staff a few months back. Some other companies, such as Crypto.com, Gemini, and OpenSea, had made job cuts too.
All of the financial companies had overhired a lot of employees. A senior analyst Dan Dolev from Mizuho said that when the companies had easy money, they kept on hiring, hiring, and hiring. “I am not shocked to see such cuts,” He Further Added.
About Robinhood Trading Firm
Robinhood had worked quite hard to reach the position where it is now. Recently it launched a crypto wallet product and listed some new coins. Robinhood has given a significant amount of exposure to its customers.
Robinhood neglected to invest in resources and compliance rules as it grew too quickly. It recently got a notice from New York Administrators about a 30 million USD fine imposed on Robinhood’s Crypto Division.
