Robinhood, the commission-free investing app, is undergoing its third round of layoffs in slightly over a year, resulting in a significant reduction of the company’s workforce since the beginning of 2022.
This latest round will impact approximately 150 employees across various departments, including customer experience and platform shared services, customer trust and safety, and safety and productivity, according to an internal memo obtained by The Wall Street Journal.
The decision to downsize the workforce was driven by the need to adapt to changing volumes and align team structures more effectively, as highlighted in a message from Chief Financial Officer Jason Warnick, as reported by the outlet. The exact timeline for the implementation of these layoffs remains uncertain, coinciding with the company’s efforts to navigate a slowdown in customer trading activity.
A Robinhood spokesperson told The Journal: The company is focused on maintaining operational excellence and fostering effective collaboration. They emphasized that teams may need to make adjustments based on factors such as volume, workload, organizational design, and other relevant considerations.
At present, Robinhood’s LinkedIn profile proudly displays available job opportunities for 185 positions at its main office in Melo Park, California, along with additional offices in New York, Denver, Seattle, and various other locations.
Despite the upcoming layoffs, Robinhood’s financial performance has shown significant improvement. In the first quarter of 2023, the stock trading and investing platform reported a revenue of $441 million, marking a substantial increase from the $299 million earned during the same period in 2022, as stated in their earnings report.
The announcement of layoffs came shortly after Robinhood’s acquisition of no-fee credit card startup X1 in a $95 million cash deal. This acquisition enables Robinhood to provide its customers with credit options, as highlighted by co-founder and CEO Vlad Tenev in a statement on the company’s blog.
This round of layoffs, which affects 150 employees, is the third since April 2022. In the previous rounds, Robinhood let go of about 9% of its full-time staff in April and an additional 23% in August. These actions resulted in a significant reduction in the company’s workforce, going from approximately 3,800 employees in 2021 to around 2,300 by the end of 2022. Currently, Robinhood employs approximately 1,200 individuals, according to its listing on the job board Zippia.
While Robinhood experienced its most successful quarter in the second quarter of 2021, boasting over 21 million monthly active users who utilized the app to trade stocks and invest via their mobile phones during the pandemic, the number of monthly active users has declined to 11.8 million in the first quarter of 2023.
Despite the fluctuations, Robinhood’s shares closed with a 3.2% increase on Tuesday and have seen a 23% rise year-to-date. However, it’s important to note that the shares have declined approximately 86% from their record high in 2021, shortly after the company’s initial public offering.