Robinhood announced it is reducing its staff by 23% (around 780 employees). Earlier this year Robinhood laid off 340 employees, which was 9% of its workforce. Employees in operations, marketing and programme management positions will be mostly affected by the cuts, the anti-money laundering department will remain intact.
Robinhood CEO and Co-Founder, Vlad Tenev wrote the following in a blog post:
“Let me explain how we arrived at this decision. Earlier this year, I announced that we would be letting go of 9% of our workforce and focusing on greater cost discipline throughout the organization.
“This did not go far enough. Since that time, we have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody.”
Robinhood’s revenue dropped to $318 million compared to $565 million(-44%) in the same quarter in 2021.
There are speculations that FTX is due to acquire Robinhood. Although Bankman-Fried (which is holding a 7.6% stake in Robinhood) has denied FTX is intending to acquire Robinhood, staff reduction often takes place during acquisitions or partnerhsips.
CoinFLEX, for example, recently reduced its staff but made it clear that the decision was based on potential acquisition or partnership:
“When we affect the plans around the CoinFLEX Composite distributions (inclusive of rvUSD, equity and FLEX Coin), we want to be in a position, cost-wise, to make sure that we have every chance to be a successful business which begins by being a leaner business staffing-wise.
“This means that we, unfortunately, had to let go of a significant number of the CoinFLEX team across all departments and geographies. The staff cuts and non-staff costs that we have made will reduce our cost base by approximately 50-60%.
“The majority of the team that remain are focused on product and technology, which remains the core of our business. We will monitor costs to ensure we operate as efficiently as possible and scale as volumes come back.
“The intention is to remain right-sized for any entity considering a potential acquisition of or partnership opportunity with CoinFLEX.”
This article was written by Matti Williamson at www.financemagnates.com.