Robinhood, the fintech trading company located in the Bay Area is axing around 9% of its full-timers. That is around 340 members of the fintech company’s workforce. This was revealed by CEO and co-founder Vlad Tenev to the workforce at the Menlo Park company. Tenev founded the commission-free financial trading company along with Baiju Bhatt in April 2013.
Tenev said that the rapid growth in headcount at Robinhood (NASDAQ – HOOD) had led to duplicate job roles and functions. It had created needless complexity and layers, more than optimal for operations.
– Advertisement –
The stock of Robinhood went down 3.75% on Tuesday after Tenev delivered the message through a blog post. It fell an additional 5.5% during trading after-hours. Even since R-hood went public in July at $38 and climbed to $70 in August 2021, the price has since slid to $10 per share.
Crypto Services Drove Last Year’s $1.82B Revenue: Up 89% Compared To Previous Year
Terry said that they had experienced exponential growth in revenue starting in 2019 from $278M to $1.8B in 2021. To meet the market and customer demands, Robinhood was forced to increase its headcount from 700 to 3,800, a nearly 6-fold increase during that period.
Tenev assured that R-hood had $6B in cash sitting on its books, and was thus in a safe and secure position. He said that the company would carry on with the growth momentum of its products, continuing with its efforts to grow in the international market.
A Significant Part Of Robinhood’s Revenue Comes From Crypto Transactions
– Advertisement –
R-hood is femur for the mobile app that is developed. It helps users to trade in cryptocurrencies, stocks, and exchange-traded funds. Around 31M users used the Robinhood app.
The layoffs news from Robinhood coincided with similar layoffs announced by companies engaged in the mortgage sector. Rising rates of interest have severely affected the mortgage sector in the US.
While crypto accounted for 41% of the total revenue of the company in quarter 2 in 2021, it fell to 13% in quarter 4. But Robinhood has not lost its focus on the sector and has moved towards expanding its crypto products.