Stock trading and investing platform Robinhood informed its employees that inflation and the crypto market crash have forced the company to make significant layoffs.
The company previously cut 9% of jobs in early 2022 as a cost-saving measure. Now, Robinhood will let go of 23% of its workforce as part of a company-wide reorganization.
“While employees from all functions will be impacted, the changes are particularly concentrated in our operations, marketing, and program management functions,” wrote Vlad Tenev, Robinhood’s chief executive officer and co-founder, said in an Aug. 2 message to employees.
“We often talk about our mission to democratize finance for all, and one of the most cherished aspects of Robinhood is the teamwork and camaraderie involved in working towards our mission — together,” he added. “I feel incredibly privileged and fortunate to have the opportunity to build with all of you.”
Tenev said the initial 9% staffing cut did not do enough to help the company with “additional deterioration of the macro environment.”
Specifically, the executive cited inflation which is at a 40-year high and the collapse of the price of Bitcoin in the spring of 2022 which lead to a cryptocurrency sell-off.
The economic and financial turmoil left Robinhood with “more staffing than appropriate.”
Employees were notified of the employment status through an email and a Slack message immediately after Tenev’s message was released.
“Departing Robinhoodies will be offered the opportunity to remain employed with Robinhood through October 1, 2022 and receive their regular pay and benefits (including equity vesting). They will also be offered cash severance, payment of COBRA medical, dental and vision insurance premiums and job search assistance,” the CEO’s message advised staff members. “We know that this news is tough for all Robinhoodies, and we are also offering wellness support to those who would like it.”
CBS News notes the trading platform has lost 50% of its value during the course of 2022. The company’s stock is currently valued at $9.92.
Robinhood’s revenue is also roughly half of what it was in 2021. At the June 20 close of the quarter, the company had generated $202 million in transaction-based revenue. Robinhood had reported $451 million at the same point one year earlier.