Approximately 150 full-time employees are set to lose their jobs, as revealed in internal company communications. Robinhood Markets, an online brokerage firm, is reportedly planning to lay off around 150 full-time staff members, constituting 7% of its overall workforce. This marks the third round of layoffs for the company in slightly over a year.
According to a message from Robinhood’s Chief Financial Officer Jason Warnick, as reported by The Wall Street Journal, the reductions are being implemented to “adapt to trading volumes and enhance team structures.”
A spokesperson from this financial services company neither confirmed nor denied the layoffs but mentioned:
“We are actively working towards operational excellence by continually assessing our collaborative efforts. In certain cases, this may entail teams making adjustments based on workload, volume, organizational design, and other factors.”
Only five days after Robinhood’s acquisition of credit card company X1 for a sum of $95 million, news of the layoffs emerged. This follows Robinhood’s previous reduction in workforce, where they decreased their total headcount by 9% in April last year, and later released 23% of the remaining staff in August. These measures were taken due to a decrease in trading activity and subdued prices of equities and cryptocurrencies, leading to a contraction in profit margins.
The two rounds of layoffs resulted in the elimination of over 1,000 employees from Robinhood’s workforce. During the second quarter of 2021, the company reached its pinnacle with 21.3 million active users and generated revenue exceeding $565 million. However, recent developments have been unfavorable for the brokerage firm. Robinhood’s Q1 2023 results displayed a significant decline, with a 44% decrease in monthly active users and a 30% year-over-year drop in revenue.
Currently, Robinhood shares are trading at $9.63, reflecting an 18% increase for the year. However, it is important to note that the shares have experienced a significant decline, plummeting more than 82% from their all-time high reached in August 2021.
Robinhood’s Q1 Crypto Revenue Sees a 30% Year-on-Year Decline
Robinhood, the popular trading app, experienced a decline in revenue for its crypto trading business during the first quarter of 2023. The company reported $38 million in crypto trading revenues for Q1 2023, showing a 30% decrease compared to the same period in 2022 when it generated $54 million.
The earnings report for Robinhood’s Q1 2023, released on May 10, disclosed these figures. Despite the decline in crypto trading revenue, the company’s total revenue showed a year-on-year increase. In Q1 2023, Robinhood achieved $441 million in total revenue, marking a significant rise of approximately 47.5% compared to the net revenue of $299 million in the first quarter of 2022.
Currently, the trading app holds approximately $12 billion worth of cryptocurrency in its custody, reflecting a 50% increase over the quarter. However, when compared to the same period last year, this amount is down by 40%.
The decline in crypto revenue for the trading app aligns with the overall market trend, as there was a 40% decrease in the market capitalization of digital assets during the same period. According to CoinGecko data, the global market cap for cryptocurrency was $2.1 trillion on March 31, 2022, whereas it stood at $1.2 trillion on the same date this year.