Robinhood to cut 9 percent of its full-time employees
The chief executive of online trading platform Robinhood announced on Tuesday the company would be cutting 9 percent of its full-time staff, explaining that its rapid growth had led to “some duplicate roles and job functions.”
Robinhood CEO Vlad Tenev told his employees Robinhood had experienced rapid growth between 2020 and part of 2021, including a rise in revenue from roughly $278 million in 2019 to more than $1.8 billion in 2021. Tenev noted that net funded accounts also rose from 5 million to 22 million.
“To meet customer and market demands, we grew our headcount almost 6X from 700 to nearly 3800 in that time period,” the Robinhood executive explained. “This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal.
“After carefully considering all these factors, 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 customers,” he added.
Tenev said that the company would start reaching out to employees soon to discuss next steps and said the company would be providing “significant support” around job search assistance, separation packages and health care.
The development comes less than a year after the commission-free online trading app filed for an initial public offering, with $100 million listed as the size of its offering.
It came around the same time the Financial Industry Regulatory Authority levied its largest-ever fine at the time against Robinhood after alleging incorrect information had been given to customers regarding the risks they could be taking and the net value of investments, among other concerns.