Robinhood has announced that it will have to let go almost a quarter of its workers in the coming weeks due to a downturn in fortune. According to the official announcement by the platform, the company has continued to witness a massive deterioration in its fortunes amid the general market downturn. The firm released a blog post about the update during a period when it shared its earnings in the second quarter.
The platform plans to axe 700 workers
The brokerage platform is also in hot waters due to certain violations which saw the firm breach money laundering and other acts. With this, the Financial Services department in New York has slammed a $30 million fine on Robinhood. According to the platform’s executive Vlad Tenev, the company will suffer the impact of the layoffs as several sections of the company will be affected. In his statement, he noted operations and marketing departments as two of a few that would lose many of their workers.
According to analysts’ estimates, more than 700 workers currently at Robinhood will be axed in the coming days. However, reports also claim that the workers would be allowed to stay as employees until October 1. They would be paid their salaries and every other benefit during the period.
Robinhood CEO takes responsibility for the layoffs
Robinhood axed about 9% of its workers at the beginning of this year, but the CEO said in this update that the remaining figure still put a strain on things. In his statement, he cited the conditions in the general economy amid the crashing market as a deterrent. He noted that these factors had reduced the number of traders on the platform drastically. The CEO also noted that Robinhood calculated massive patronage like witnessed during the coronavirus pandemic’s peak period.
However, he chooses to be the one to blame for the recent layoffs and axing of staff that has since become a thing since the year started. The company has witnessed a massive downturn in revenue, going down as much as 44% year on year. Users on the platform also dropped massively to a tune of 14 million monthly, with the assets on the platform dropping by 31%. However, after fellow crypto platform boss Bankman Fried bought a stake, the company’s shares saw a massive boost.