Robinhood, the commission-free investing app, is implementing its third round of layoffs in just over a year, reducing its full-time staff by approximately 7%. This reduction will impact around 150 workers across various departments, including customer experience, platform shared services, customer trust and safety, and safety and productivity. The layoffs are an effort to align team structures and accommodate changes in trading volumes. While the exact timing of the layoffs remains uncertain, they come as the company faces a slowdown in customer trading activity.
Robinhood’s Chief Financial Officer, Jason Warnick, explained in an internal memo that the company is striving for operational excellence by making necessary adjustments based on factors such as volume, workload, and organizational design. The company’s LinkedIn page currently advertises 185 job openings at its headquarters in Menlo Park, California, as well as other national locations.
Despite the layoffs, Robinhood’s revenue is on the rise. The company reported earnings of $441 million in Q1 of 2023, compared to $299 million during the same period in 2022. The announcement of layoffs coincided with Robinhood’s acquisition of no-fee credit card startup X1 for $95 million in cash. This acquisition allows Robinhood to expand its offerings to include credit options for customers.
These recent layoffs mark the third round of workforce reductions for Robinhood since April 2022. Initially, the company laid off approximately 9% of its full-time staff last April and an additional 23% in August. As a result, the company’s workforce decreased from about 3,800 employees in 2021 to around 2,300 by the end of 2022. Currently, Robinhood has a workforce of approximately 1,200 according to job board Zippia.
Robinhood’s CFO, Jason Warnick, communicated news of the impending layoffs through an internal memo, attributing the decision to the need to adjust to changes in trading volumes following a decline in customer activity. The first quarter of 2021 was Robinhood’s most successful period, with over 21 million monthly active users. However, in the first quarter of 2023, monthly active users dipped to 11.8 million. Despite recent volatility, Robinhood’s shares have seen a year-to-date increase of 19.18% in premarket trading on Tuesday. However, they are down approximately 86% from their record high in 2021.
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