Robinhood, the popular American online brokerage platform, cuts its workforce by 23%, as stock markets “continue to suffer”, report the the wall street journal.
This is the second layoff plan this year for the company, which had already separated in April from 9% of its staff. Altogether, something “1,000 jobs are being cut”, underlines the American economic daily.
Robinhood CEO acknowledges that the first wave of departures had no “‘not gone far enough’ to help the company reduce its costs” and that he had overestimated “the strong mobilization of individuals” observed at the height of the pandemic. “It’s my fault”, writes Vlad Tenev in a letter to the team.
From 21 million to 14 million users
“The number of monthly active users has dropped to 14 million”, a 34% drop in the second quarter compared to a year ago, the platform said. Turnover fell by 44% to 318 million dollars (approximately 311 million euros).
Robinhood has democratized trading “with its easy-to-use online brokerage platform designed for mobile phones,” recalls the newspaper. This time last year, when the company was at its peak, it “had over 21 million active users, who flocked to its app” to trade stocks and cryptocurrencies.
In recent months, other companies in the tech sector such as Twitter, Tesla, Shopify or Netflix “laid off in the face of slowing growth and the threat of an impending recession”. Robinhood has, more than others, suffered from the vagaries of the stock markets.
“Compared to larger, well-deployed players in the industry, Robinhood users are generally younger and have less money in their wallets.” They also received more support “growth stocks and cryptocurrencies”two categories that have been battered since the beginning of the year.
$30 million fine
And to make matters worse, the company was fined Tuesday, August 2, 30 million dollars (29.3 million euros) by the regulator of financial services in the State of New York. “for alleged violations of anti-money laundering and cybersecurity regulations”.