The Robinhood shares and crypto trading app is ending the month of April on a tensed note. The shares of Robinhood plummeted after the company decided to let go of 9 percent of its full-time work force. The company backed its decision saying that it was shutting down several duplicated roles and job functions that were generated between 2019 and 2021 when its employee count swelled to 3,800 from 700. At the time of writing, each Robinhood share was priced $10 (roughly Rs. 765) — reportedly just 12 cents (roughly Rs. 0.057705) above its all-time low.
Vlad Tenev, the CEO of Robinhood has posted an official blog detailing the reasons behind the company’s action.
“Throughout 2020 and H1 2021, we went through a period of hyper growth accelerated by several factors including pandemic lockdowns, low interest rates, and fiscal stimulus. To meet customer and market demands, we grew our headcount almost six times. This rapid headcount growth has led to some duplicate roles and job functions. After carefully considering all these factors, we determined that making these reductions to Robinhood’s staff is the right decision to improve efficiency,” said Tenev.
While the company is looking to assist its departing colleagues, its decision has garnered harsh responses from people on Twitter.
Some impressive corporate speak going on here, as Robinhood announces layoffs of 9% of its staff. Basically claims it hired too many as it grew because it wasn’t paying attention to how it was staffing roles. pic.twitter.com/yQ67mKinsu
— Seth Miller (@WandrMe) April 26, 2022
Robinhood has vouched to help its laid-off employees with separation packages, healthcare, and job search assistance.
The move comes ahead of Robinhood’s Q1 2022 earnings release slated for Thursday, April 28.
Despite the current share value drop, Robinhood has called its financial position “strong”.
As per Yahoo Finance, Robinhood’s current market cap stands at $8.5 billion (roughly Rs. 65,132 crore). In his blog post, Tenev noted that the company has over $6 billion (roughly Rs. 45,976 crore) in cash on the company’s balance sheet.
The platform is continuing to expand its services for crypto investors.
The platform has also acquired British fintech app Ziglu, an electronic money institution that lets users buy and sell 11 different cryptocurrencies as well as make payments overseas.
“We are scrutinising our headcount growth targets, and making sure that we continue to prioritise internal opportunities for automation and operational efficiency that serve our customers,” the company CEO added.