Retail trading platform Robinhood has announced that it will be slashing its staff by 23% in light of the “deterioration of the Macro Environment.” Based on the company’s staff strength, about 780 workers will be laid off.
This comes after the platform laid off 340 workers, or 9% of its workforce earlier this year. The recent cut will affect employees in program management, marketing, and operations, but the anti-money laundering department will not be affected.
Robinhood Had Already Cut Its Workforce By 9%
Co-Founder and Chief Executive Officer of Robinhood, Vlad Tenev, commented on the development. He stated that the company had already cut down 9% of its staff to ensure greater cost discipline throughout the company.
However, he pointed out that the move seemed not to be enough. “Since that time, we have seen additional deterioration of the macro environment,” Tenev added. The economic situation has reduced assets under control as well as customer trading activity.
Robinhood announced revenue of $318 million in the second quarter of 2022, which is 44% lower than the $565 million recorded in the same period in 2021.
An Acquisition Could Be Looming
There are rumors that Robinhood could be acquired by FTX. While Bankman-Fried is holding a 7.6% stake in Robinhood, he has denied the speculation. His statements may not be fully convincing now that Robinhood has trimmed down its staff further. Staff reduction is part of the measures taken during partnerships or acquisitions.
For example, CoinFLEX recently cut down its number of staff ad explained that the decision was done based on a potential partnership or acquisition.
Robinhood reported a net loss of $295 million or 23 cents per share for the second quarter of the year. However, it was lower than the $502 million or $2.16 per share loss reported in the same period last year.
The platform’s growth has slowed down over the past year for some reasons. One of the reasons is the platform’s projection to replicate its impressive performance during the first half of 2021. Then the surrounding GameStop and other meme stocks led to a massive surge in demand. This sent Robinhood’s revenue souring. But the hype has subsided and the market has returned to its normal level.
Additionally, the restrictions during the Covid-19 peak period have to be lifted. This means that customers no longer spend much time at home, which has affected the platform. Other reasons like the disinterest among retail traders have affected the platform’s revenues.