Robinhood lays off 23% of workforce amid crypto market crash and revenue drop

Robinhood announces layoffs of 23% of its workforce amid a drop in crypto market value and a 44% decrease in revenue. The company also saw a 34% decline in monthly active users and a 37% drop in assets under custody.

Robinhood announced that it would lay off 23% of its current workforce. This represents 780 employees. The departments most affected are operations, marketing, and program management. Photo: CHRIS DELMAS/AFP/Getty Images

  • Robinhood announces layoffs of 23% of its workforce due to market conditions.
  • Q2 earnings report shows a 44% drop in revenue and a 34% decline in monthly active users.
  • Layoffs will impact various departments, and the company has received a $30 million fine.

In a blog post on the company’s website, CEO Vlad Tenev explained that these factors have led to a decrease in trading activity and assets under custody for the platform. Tenev stated, “Last year, we took on many of our operational functions under the assumption that the increased retail engagement we had seen with the equity and crypto markets in the COVID era would persist through 2022…In this new environment, we operate with more staff than is appropriate.

Unfortunately, the layoffs will impact various departments within the company, with the operations, marketing, and program management departments being hit the hardest. This isn’t the first time Robinhood has had to announce mass layoffs, as in late April of this year, the platform announced that it would be laying off 9% of its full-time employees due to a decline in users.

Furthermore, Tenev’s announcement coincides with the $30 million fine issued by the New York State Department of Financial Services to Robinhood Mkts Rg-A, a subsidiary of the company, for violating reporting requirements related to anti-money laundering and cybersecurity regulations.

On a brighter note, despite the recent decline in commercial users, at the end of last year and early 2022, there were over 2 million people on the waiting list for Robinhood’s cryptocurrency wallet launch.

(But let’s not forget) Robinhood’s second-quarter earnings report reported a 44% drop in revenue from the previous year and a decrease of more than 7 million, or 34%, in monthly active users. Additionally, assets under custody were down by more than $37 million, or 37%, from the second quarter of last year.

It’s clear that these recent developments have been detrimental to Robinhood and its employees. Tenev acknowledged his role in the “ambitious” staffing trajectory of the company, stating, “This is up to me.”

In summary, the cryptocurrency market crash, coupled with a decline in revenue and users, has unfortunately led to layoffs for a significant portion of the Robinhood team.