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Robinhood cuts nearly 1 / 4 of employees as crypto dives

Baiju Bhatt (Left) And Vlad Tenev, Founders Of The Online Brokerage Robinhood, Walk Along Wall Street After Going Public With An Ipo Earlier In The Day On July 29Getty Images

Trading platform Robinhood is slicing nearly 1 / 4 of its employees as a consequence of excessive inflation and the falling cryptocurrency market.

The firm stated the financial local weather had decreased buying and selling exercise, which had boomed on the peak of the pandemic.

The move comes after the agency reported quarterly revenues of $318m (£260m), 44% down on $565m a yr earlier.

In April, the agency slashed 9% of its workforce, which its boss Vlad Tenev stated “did not go far enough”.

“Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the Covid era would persist into 2022,” stated Mr Tenev.

“In this new environment, we are operating with more staffing than appropriate. As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me.”

The newest cuts will have an effect on 780 members of employees, and are available along with the cuts introduced earlier this yr.

Mr Tenev stated all employees would obtain “an email and a Slack message with your status – with resources and support if you are leaving”.

He added staff, referred to as “Robinhoodies” within the California-based firm, would have the ability to keep in place till 1 October, be provided a severance bundle and given assist in looking for one other job.

“We know that this news is tough for all Robinhoodies, and we are also offering wellness support to those who would like it,” he stated.

Robinhood’s commission-free buying and selling proved vastly fashionable with novice merchants throughout the Covid lockdowns, which noticed the variety of account holders double.

But its buyer base has been spooked by the price of living rising and better rates of interest, which have hit international markets and despatched cryptocurrencies slumping.

Robinhood Pop-Up Kiosk On Wall Street

Getty Images

Its month-to-month energetic customers additionally appeared to fall by roughly a 3rd, at 14 million for June 2022 in contrast with 21.three million within the second quarter of 2021, Reuters reported.

The on-line brokerage’s mission is to “democratise finance for all”, however it hit the headlines in January 2021 for limiting the shopping for of shares within the US video games agency GameStop, which induced outrage amongst Americans shopping for the corporate’s inventory with the purpose of pushing up the worth.

Mr Tenev apologised to prospects at a US congressional listening to wherein lawmakers stated the move had raised questions on equity in monetary markets.

The platform has additionally confronted criticism for exposing amateurs to dangerous merchandise similar to meme shares – shares which grow to be fashionable by way of social media – and cryptocurrencies.

The firm stated in its drive for “greater cost discipline” it will restructure the organisation by having normal managers taking over “broad responsibility” for its particular person companies.

Mr Tenev stated the change would “flatten hierarchies” and “remove redundant roles and positions”.

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