Robinhood is laying off 9% of its full-time employees
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1 min read . Updated: 27 Apr 2022, 05:46 PM IST Investment platform says it is cutting back on duplicate roles following sharp growth
Robinhood Markets Inc. said it was laying off 9% of its full-time workers and is cutting back on duplicate roles it added when the investment platform was growing rapidly beginning in 2020.
Shares fell 5% in after-hours trading closing Tuesday after the company announced the layoffs in a blog post.
The investment platform, which is popular with individual investors, grew sharply at the beginning of the Covid-19 pandemic as more people started investing in cryptocurrencies and so-called memestocks like GameStop Corp. During the period, the company’s head count grew from 700 to 3,800, Mr. Tenev said.
“This rapid head count growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal," said Vlad Tenev, chief executive of Robinhood. “While the decision to undertake this action wasn’t easy, it is a deliberate step to ensure we are able to continue delivering on our strategic goals and furthering our mission to democratize finance."
Robinhood is set to report its quarterly results Thursday. In the blog post, Mr. Tenev said Robinhood has $6 billion in cash on its balance sheet.
The stock has fallen sharply following the company’s initial public offering last summer. The company went public at a $38 IPO price. Shares closed Tuesday at $10.
In an attempt to jump-start slowing growth on the platform, the company announced last month that it would be extending trading hours—to 7 a.m. ET to 8 p.m. ET. That announcement prompted a sharp rise in the stock price, but those gains have since been wiped away.
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