Robinhood to cut nine per cent of staff

Discount brokerage Robinhood is to sack nine % of its staff, citing an unwieldy development curve that resulted within the creation of “duplicate roles and job features”.

The job cuts had been revealed in a weblog put up by CEO Vlad Tenev on the eve of the discharge of the corporate’s third quarter outcomes.

Tenev says that “all through 2020 and H1 2021, we went via a interval of hyper development accelerated by a number of components together with pandemic lockdowns, low rates of interest, and financial stimulus.”

During this era, the corporate grew web funded accounts from 5M to 22M and income from ~$278M in 2019 to over $1.8B in 2021. To meet buyer and market calls for, headcount soared virtually 6X from 700 to practically 3800 in the identical timeframe.

“This speedy headcount development has led to some duplicate roles and job features, and extra layers and complexity than are optimum,” says Tenev. “After fastidiously contemplating all these components, we decided that making these reductions to Robinhood’s staff is the proper resolution to enhance effectivity, enhance our velocity, and be sure that we’re responsive to the altering wants of our clients.”

He says the corporate may also pay nearer consideration to headcount development targets, “ensuring that we proceed to prioritise inner alternatives for automation and operational effectivity that serve our clients. Doing so permits us to be extra resilient in laborious instances, and stronger in the course of the good”.

Robinhood posted a web loss of $423 million, or 49 cents a share, in its fourth quarter leads to January, prompting a inventory market rout that resulted in its share value slipping under $10.

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