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- Robinhood, an online brokerage company, will eliminate approximately one-fourth of its working staff
- The reason for this step mentioned a huge crypto market collapse.
On Tuesday, the chief executive officer and co-founder of the company Vlad Tenev informed the audience by a blog post. On that very day, the financial results of the company were published, and also it was fined $30 million by the New York State Department of Financial Services for violating the Anti-money laundering, cybersecurity, and consumer protection laws.
In the post, Tenev explained that the elimination process would affect the functionality of the company, specifically operations, marketing, and program management, as approximately 23% of employees will be eliminated. The Financial Times, a daily newspaper, calculated the number of employees that would be eliminated is about 780.
This is the second round of elimination as the company has already eliminated about 9% of its employees at the beginning of this year. However, the CEO mentioned that the slash “did not go far enough.” He highlighted the financial conditions and the breakdown of the crypto industry as an element in the step.
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Tenev said:
“This has substantially minimized customer trading activity and assets under custody.”
Further, the company has mistakenly assumed the upraised engagement, which was at the start of the COVID-19 pandemic, will be maintained.
Tenev mentioned:
“ As a chief executive officer of a company, I approved and took the duty for our determined staffing path- this is on me.”
Financial results not up to the mark
The financial results were scheduled to release one day after then they actually did. The result was not up to the mark as the total revenue was at $318 million, which was 44% low year on year. Simultaneously, it was up by 6% from the first quarter. The loss was of $295 million, somehow less than the loss of the second quarter of the last year, which was $502.
1.9 million active monthly users fell down as compared to the last quarter, and the assets under custody also fell 31%.
In May 2022, Sam Bankman-Fried, the FTX founder and CEO, purchased 7.6% shares in the company for $650 million, which eventually led the company to have a hike.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
