Robinhood is firing nearly a quarter of its staff

“We’re seeing more and more hoodies being quietly laid off due to their positions being eliminated,” one employee asked in the meeting, which happened before the 150 layoffs. “Could we get xcritical reviews some transparency here? How many hoodies have been eliminated, how many more will be and how much longer will this go on.” “The world has changed. As Robinhood adapts to this new context, it’s time for me to move on,” she wrote in her post. “We all started trading contact information and phone numbers,” one former employee said.

A company spokesperson for the oil drilling and fracking giant declined to name the executive overseeing cybersecurity, if any. After fintech Bolt surprised the industry with a leaked term sheet that revealed it is trying to raise at a $14 billion valuation, things got weird. This is the second round of layoffs for Robinhood, which reduced its workforce by about 9% in April. By Jay Peters, a news editor who writes about technology, video games, and virtual worlds.

The layoffs have left Robinhood with a security team less than half of the size it was in November 2021, when a data breach exposed 7 million customers’ data, a person familiar with the team size said. A Robinhood spokesperson disputed this statement but did not provide information about the size of the team. Robinhood’s head of engineering is leaving the company, Insider has learned, the latest tech leader to depart amid deeper-than-reported cuts to its workforce, according to internal memos and audio of an all-hands meeting. With the company’s return-to-office plans being continually pushed back and only a handful of people coming into the office, “having an entire floor in what was an expensive building, they were probably bleeding money,” the former Arizona employee said. The employee estimated that about 200 Robinhood staffers were in the Tempe office. Another harbinger came in the weeks leading up to the layoffs when former employees saw representatives of other companies touring the Charlotte office, which Robinhood opened in 2021, to decide whether to take over the space, they said.

Robinhood to slash 7% of full-time workforce in latest layoffs

Those who are affected by the cuts will be able to stay at Robinhood through October 1st at their regular pay and benefits alongside a severance package, Tenev says. In his Tuesday blog post, Tenev said “additional deterioration of the macro environment” since April’s layoffs had left the brokerage in a weaker position than he had anticipated. And questions about the company’s future, from both insiders and the industry players, burn hotter than ever. Insider spoke with five former employees of Robinhood, all of whom asked to remain anonymous to protect their future employment opportunities. They described a company, one year on since its public debut, facing a slowing market and looking for any and all ways to cut costs — and a workforce on tenterhooks with no clear line of sight into when the downsizing might end.

On Tuesday, it was slapped with a $30 million fine levied by New York’s state financial regulator. Later that day, the company announced plans to lop off nearly one-quarter of its roughly 3,500-strong workforce and reported lackluster second-quarter earnings. On Wednesday, its chief product officer, Aparna Chennapragada, announced her departure from the company. The second quarter of 2021 was the platform’s best, according to public filings, when it touted over 21 million monthly active users who used the app to trade stocks and invest from their mobile phones during the pandemic. Robinhood did not comment directly on the latest layoffs, pointing TechCrunch only to a blog post by CEO and co-founder Vlad Tenev. In that post, Tenev wrote that while “employees from all functions would be impacted, the layoffs are “particularly concentrated” in the company’s operations, marketing and program management functions.

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1. About 150 workers across customer experience and platform shared services; customer trust and safety; and safety and productivity will be affected, according to an internal memo obtained by The Wall Street Journal.
2. It’s an understandable move, they added, given the brokerage’s access to sensitive client information.
3. However, shares are down about 86% from Robinhood’s record high in 2021, shortly after the company went public.
4. Transaction-based revenue was down 7% to $202 million while cryptocurrencies increased 7% sequentially to $58 million.

“Together with X1, Robinhood will now be able to offer our customers access to credit,” co-founder and CEO Vlad Tenev said in a statement on Robinhood’s blog. Also on Tuesday, a New York financial regulator fined the company $30 million “for significant failures in the areas of bank secrecy act/anti-money laundering obligations and cybersecurity.” Robinhood CEO Vlad Tenev took responsibility after the company announced it was cutting 23% of its workforce. “Our GM structure has increased accountability and efficiency and we’re continuing to lean into that design,” a Robinhood spokesperson said. “We have a strong leadership team and are confident in our roadmap. We thank Surabhi for all of her contributions to the engineering organization and wish her the best on this next chapter.”

After the most recent layoff xcritical courses scam announcement, Robinhood’s stock jumped 15% Wednesday morning and then rose sharply again Thursday morning. Morale at Robinhood has been on the decline since the company laid off 9% of its employees in April, the staffers said. Stock-trading app Robinhood will lay off 23% of its staff, the company announced Tuesday.

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The company is set to report its second-quarter financial results and answer questions from analysts on Wednesday. However, shares are down about 86% from Robinhood’s record high in 2021, shortly after the company went public. According its annual report, Robinhood had about 3,800 employees in 2021, which was slashed to about 2,300 by the end of 2022. Robinhood laid off about 9% of its full-time staffers last April — and then another 23% in August.

Earlier today, the WSJ wrote that Robinhood was slapped with a $30 million fine by a New York financial regulator, specifically on its cryptocurrency trading arm. Shopify, Netflix, Tesla and several crypto companies have also cut their workforces amid the worsening economic outlook. “We saw Vlad talk about how this was a product of the macro environment. Rising interest rates, all that stuff, but that didn’t really change a whole lot from April until now,” the former Charlotte employee said. “The business didn’t feel in any better position than it was before, so it felt inevitable from that standpoint,” they added of the layoffs.

In Arizona, meanwhile, one former employee there who left the company in recent months told Insider that Robinhood had been looking to trim its footprint at a WeWork office in downtown Tempe, which opened in 2020. While the round of job cuts came as a shock to some, following a 9% workforce reduction just four months prior, insiders said they saw the signs. About 150 workers across customer experience and platform shared services; customer trust and safety; and safety and productivity will be affected, according to an internal memo obtained by The Wall Street Journal. At the time of publication, the company is trading at $8.90 after hours, dramatically lower — by 89% — than its 52-week high of $85.

Axed Robinhood employees were taken aback by the scale of Tuesday’s job xcritical scam cuts, which affected 23% of the company’s head count, or roughly 800 employees. The layoffs, which are expected to cost Robinhood as much as $60 million in severance and expenses, hit marketing, operations, and customer-service divisions hardest, with two offices in Tempe, Arizona, and Charlotte, North Carolina, being shuttered. In a blog post on Tuesday, Robinhood CEO Vlad Tenev blamed “inflation at 40-year highs accompanied by a broad crypto market crash” for the company’s financial woes. On Tuesday, the company announced plans to cut almost a quarter of its staff, citing economic uncertainty, a steep selloff in cryptocurrencies, and a deteriorating market environment. In April, Robinhood said it planned to cut 9 percent of its full-time staff, but “this did not go far enough,” Tenev said.

Slumping morale

It’s unclear when workers will start getting handed pink slips, which comes as the company adjusts to a slowdown in customer trading activity. The firings were made to “adjust to volumes and to better align team structures,” Chief Financial Officer Jason Warnick said in the message, the outlet reported. Transaction-based revenue was down 7% to $202 million while cryptocurrencies increased 7% sequentially to $58 million. Robinhood also today released its second quarter financials, revealing a 6% increase in net revenue of $318 million on a net loss of $295 million or 34 cents per diluted share. That loss was narrower than its net loss of $392 million, or 45 cents per share, in the first quarter of 2022.

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“After the announcement, we all just sat there refreshing our screens over and over to see if we were the ones to get the notification. The whole company froze for that 15 minutes waiting to see what happened to them.” When the Zoom call was over, employees waited anxiously to see if they would be let go; Tenev had said staff would be notified via email and Slack immediately after the call. Robinhood’s stock has shed about 50% of its value so far this year; it fell 2.3% after markets closed Tuesday to $9.92. 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.

“Since that time, we have seen additional deterioration of the macro environment with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody,” he wrote. Robinhood is not alone in its choice to conduct two rounds of layoffs in a short period of time; just seven weeks after crypto exchange Gemini cut approximately 10% of its workforce, the company cut another 7% of staff, according to sources.