Robinhood cuts 23% of its workforce, sales fall by 44%

The latest cuts, which will affect 780 employees, continue a huge free fall for the once-high-flying online brokerage. In a separate development on Tuesday, New York State fined the Menlo Park, California company, of $30 million.
In a blog post on the company’s website, Robinhood CEO Vlad Tenev said the “deterioration of the macro environment” — specifically decades of high inflation coupled with a cryptocurrency crash — is affecting the company’s trading business and assets in custody. has reduced.
In its second quarter earnings report, also released Tuesday, the company showed a 44% drop in revenue from a year ago. Monthly Active Robinhood Users in June decreased by more than 7 million, or 34%, and that assets in custody are down more than $37 billion, or 37%, from the second quarter of last year.
The company’s personnel and operations approach, he added, was geared to a continuation of the burgeoning crypto boom of the pandemic era.

“Last year, we staffed many of our operational functions with the assumption that the increased retail engagement we had seen with the stock and crypto markets in the COVID era would continue through 2022,” Tenev wrote in a message to employees. “In this new environment we are working with more staff than necessary.”

He added: “As CEO, I approved our ambitious personnel journey and took responsibility – this is up to me.”

The layoffs will affect employees in all positions of the company, with operations, marketing and program management being the hardest hit, he said. The company planned to notify all employees via email and Slack on Tuesday with their status and resources if they were affected.

Separately on Tuesday, the New York State Department of Financial Services fined Robinhood’s cryptocurrency arm $30 million for allegedly violating reporting requirements related to anti-money laundering and cybersecurity regulations.

As his business grew, Robinhood Crypto failed to invest the right resources and attention to develop and maintain a culture of compliance — a failure that resulted in significant violations of the department’s anti-money laundering and cybersecurity regulations, Adrienne A. Harris, the department superintendent said in a statement.

Correction: An earlier version of this story misrepresented the percentage decline in Robinhood’s assets in custody. They fell by 37% in the second quarter.

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