Stock trading platform Robinhood Markets Inc (NASDAQ:HOOD) has announced plans to slash about 23% of its global workforce. The news comes alongside a plummeting monthly active user count and disappointing second-quarter earnings results.
Robinhood Announces Job Cuts
Robinhood CEO Vlad Tenev announced the steep job cuts in a press release on Tuesday. He said most of those cuts will come in the company’s operations, program management and marketing departments. Tenev cited the “deterioration of the macro environment with inflation at 40-year highs accompanied by a broad crypto market crash” as the reasons for the layoffs.
This week's job cuts add onto the layoffs Robinhood announced in April, when it slashed its global workforce by 9%. In this week's press release, Tenev announced that the stock trading platform would flatten its organizational structure, placing new, broader responsibilities onto its new general managers.
He added that the employees whose jobs have been affected by the job cuts will receive notices via email and Slack to let them know if their positions had been eliminated or if they still had a job. Robinhood had planned to send those notices out after a company-wide meeting on Tuesday.
According to CNN, the layoffs will affect 780 workers.
Robinhood Announces A Steep Loss
The stock trading platform also released its second-quarter earnings results on Tuesday, a day earlier than expected. Robinhood came up short of the consensus estimate for revenue but beat expectations for losses, posting $318 million in revenue with a net loss of 34 cents per share or $295 million.
Refinitiv's consensus called for $321 million in revenue and a loss of 37 cents per share. Robinhood also reported a first-quarter loss of $392 million or 45 cents per share. The stock trading platform's revenue rose from $299 million in the previous quarter due to higher revenue on crypto-related activities and net interest. However, the second-quarter number plunged from the year-ago quarter's total of $565 million.
Robinhood also reported a steep sequential decline in monthly active users of 1.9 million, bringing its user count to 14 million in June. The company also reported a steep decline in assets under custody, which fell 31% quarter over quarter to $64.2 billion on the back of reduced asset valuations.
Despite the disappointing earnings results, Robinhood shares only fell 2% in after-hours trading on Tuesday and were up by almost 13% by midday on Wednesday.