Retail brokerage fintech Robinhood ended 2021 on a note of optimism, boasting that it had accumulated over $6 billion in cash and cash equivalents. By spring 2022, however, the company was singing a very different tune, seeing sluggish stock prices and anticipating a lackluster earnings report for the first quarter.
Not content to wait around for the predictable fallout from the expected decline in revenue, Robinhood leadership is taking action. Specifically, the company is laying off nearly a tenth of its 3,800 employees.
After considering a variety of factors, including redundant positions throughout the organization, Chief Executive Officer Vlad Tenev said in a company blog post, “We determined that making these reductions to Robinhood’s staff is the right decision to improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customer.”
If Robinhood leadership had hoped the layoffs would provide increased stability for the company, the results have not turned out as expected. Robinhood’s stock prices tumbled after the announcement, trading significantly below its IPO price of $38 per share last year. Despite announced plans to roll out new crypto functionality and the acquisition of other startups, it appears Robinhood’s already grim prospects for the year may be about to take a turn for the worse.