According to sources within the company, online brokerage Robinhood Markets is reportedly planning to lay off approximately 150 full-time employees, which accounts for around 7% of its workforce. This marks the third round of layoffs for Robinhood in just over a year. The Chief Financial Officer, Jason Warnick, mentioned that the layoffs were aimed at justifying volume and aligning the team structure, as stated in internal communications reviewed by The Wall Street Journal.
While a Robinhood spokesperson did not confirm or deny the reported layoffs, they did mention that the company is focused on ensuring operational excellence in its ongoing collaboration. They further stated that team changes might occur based on factors such as volume, workload, and organizational design . The news of these potential layoffs comes shortly after Robinhood's acquisition of credit card company X1 for $95 million.
Robinhood faced previous rounds of layoffs last year, where it reduced its overall headcount by 9% in April and laid off an additional 23% of its remaining staff in August. These measures were taken in response to lower trading activity and decreased profitability due to decline in stock and cryptocurrency prices. In the second quarter of 2021, Robinhood reached its peak with 21.3 million active users and over $565 million in revenue.
However, recent developments have not been as positive for the brokerage. Robinhood's first-quarter 2023 results showed a significant decline, with a 44% drop in monthly active users and a 30% year-over-year decrease in revenue. Despite these challenges, Robinhood's shares have seen some growth, currently trading at $9.63 and experiencing an 18% increase this year, even though they have fallen more than 82% from their all-time high in August 2021.
